Question - Lucinda collects Beanie Babies, and can afford to buy up to six of them. The table below describes the marginal benefit Lucinda gets for each additional Beanie Baby she adds to her collection.
|
Lucinda's Beanie Baby Marginal Benefit
|
|
Beanie Babies
|
Marginal Benefit (dollars)
|
|
1
|
$12.00
|
|
2
|
10.00
|
|
3
|
8.00
|
|
4
|
6.00
|
|
5
|
4.00
|
|
6
|
2.00
|
a. If the price of Beanie Babies is $8.00 per Beanie Baby, how many Beanie Babies would Lucinda buy if she is rational?
a) 4 Beanie Babies
b) 1 Beanie Baby
c) 3 Beanie Babies
d) 2 Beanie Babies
b. If the price of Beanie Babies rose to $10.00 per Beanie Baby, how many Beanie Babies would Lucinda buy if she is rational?
a) 3 Beanie Babies
b) 2 Beanie Babies
c) 1 Beanie Baby
d) 4 Beanie Babies