Anthony and Linda are considering buying their own home.They intend to begin the process by conducting an online search of real estate listings.The value of their time in reviewing each listing is $5.The first five listings that appear as a result of their search most closely match their stated preferences and therefore are the most valuable. Each additional five are less likely to match what they are looking for and therefore are less valuable.The marginal benefits of additional sets of listings are as shown in the table. In the diagram, draw a marginal cost curve illustrating the cost of their time for searching and reviewing each listing. Add the marginal benefit data. Identify the optimal number of listings to review.
Quantity of Marginal Benefit of
|
5
|
$ 25
|
|
10
|
17
|
|
15
|
11
|
|
20
|
5
|
|
25
|
0
|
|
|
Information Information
|
1
|
$ 0
|
|
2
|
1
|
|
3
|
3
|
|
4
|
6
|
|
5
|
10
|
|
6
|
15
|