Questions: Demand: Thinking Like a Buyer - End of Chapter Problem Consider Ron's demand for after school care for his children. The marginal benefit Ron receives for every hour of childcare is provided in the accompanying table. a. Utilizing the information in the table, move the points in the first graph to plot Ron's marginal benefit curve, and move the points in the second graph to plot Ron's demand curve. After school childcare (hours per day) Marginal benefit ( per hour) ------ 1 32 2 30 3 20 4 14 b. If an hour of childcare costs 24, how many hours will Ron purchase each day? Assume Ron can only purchase care in one-hour increments (no partial hours). hours c. If an hour of childcare costs 18, how many hours will Ron purchase each day? Assume Ron can only purchase care in one-hour increments (no partial hours). hours d. Ron's marginal benefit curve is the same as his demand curve.

Demand: Thinking Like a Buyer - End of Chapter Problem Consider Ron's demand for after school care for his children. The marginal benefit Ron receives for every hour of childcare is provided in the accompanying table. a. Utilizing the information in the table, move the points in the first graph to plot Ron's marginal benefit curve, and move the points in the second graph to plot Ron's demand curve. After school childcare (hours per day) Marginal benefit ( per hour) ------ 1 32 2 30 3 20 4 14 b. If an hour of childcare costs 24, how many hours will Ron purchase each day? Assume Ron can only purchase care in one-hour increments (no partial hours). hours c. If an hour of childcare costs 18, how many hours will Ron purchase each day? Assume Ron can only purchase care in one-hour increments (no partial hours). hours d. Ron's marginal benefit curve is the same as his demand curve.
Transcript text: Demand: Thinking Like a Buyer - End of Chapter Problem Consider Ron's demand for after school care for his children. The marginal benefit Ron receives for every hour of childcare is provided in the accompanying table. a. Utilizing the information in the table, move the points in the first graph to plot Ron's marginal benefit curve, and move the points in the second graph to plot Ron's demand curve. After school childcare (hours per day) | Marginal benefit ($ per hour) ---|--- 1 | $32 2 | $30 3 | $20 4 | $14 b. If an hour of childcare costs $24, how many hours will Ron purchase each day? Assume Ron can only purchase care in one-hour increments (no partial hours). hours c. If an hour of childcare costs $18, how many hours will Ron purchase each day? Assume Ron can only purchase care in one-hour increments (no partial hours). hours d. Ron's marginal benefit curve is the same as his demand curve.
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Solution

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Solution Steps

Step 1: Find the quantity demanded at a price of $24

Ron's demand curve is the same as his marginal benefit curve. Locate the point on the marginal benefit curve where the price ($24) intersects the curve. This occurs between 2 and 3 hours of childcare services. Since Ron can only purchase care in one-hour increments, he will purchase 2 hours of childcare.

Step 2: Find the quantity demanded at a price of $18

Again, locate the point on the marginal benefit curve where the price ($18) intersects the curve. This occurs between 3 and 4 hours of childcare services. Since Ron can only purchase care in one-hour increments, he will purchase 3 hours of childcare.

Step 3: Compare Ron's marginal benefit curve to his demand curve

The prompt states that the marginal benefit curve and demand curve are the same. This statement is visually supported by the provided graphs, where the marginal benefit and demand curves are identical.

Final Answer:

b. 2 hours c. 3 hours d. the same as

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