A government is considering undertaking a construction project of an increasing scale (ranging from 1, 2, 3, to 4). The estimated marginal costs and marginal bene?ts of each successive scale of the project are given in the
Table below.
$$\begin{array} { | c | c | c | }
\hline \text { Project } & \begin{array} { c }
\text { Marginal Cost } \
\text { (in millions) }
\end{array} & \begin{array} { c }
\text { Marginal Benefit } \
\text { (in millions) }
\end{array} \
\hline 1 & \$ 8 & \$ 11 \
\hline 2 & 11 & 13 \
\hline 3 & 18 & 17 \
\hline 4 & 28 & 23 \
\hline
\end{array}$$ What is the total cost and total bene?t of the scale-3 project?

Question

A government is considering undertaking a construction project of an increasing scale (ranging from 1, 2, 3, to 4). The estimated marginal costs and marginal bene?ts of each successive scale of the project are given in the
Table below.
$$\begin{array} { | c | c | c | } 
\hline \text { Project } & \begin{array} { c } 
\text { Marginal Cost } \
\text { (in millions) }
\end{array} & \begin{array} { c } 
\text { Marginal Benefit } \
\text { (in millions) }
\end{array} \
\hline 1 & \$ 8 & \$ 11 \
\hline 2 & 11 & 13 \
\hline 3 & 18 & 17 \
\hline 4 & 28 & 23 \
\hline
\end{array}$$ What is the total cost and total bene?t of the scale-3 project?

Quizplus · Accepted Answer

To find the total cost and total benefit of the scale-3 project, we sum the marginal costs and marginal benefits for scales 1, 2, and 3: Total cost = $8m + $11m + $18m = $37m; Total benefit = $11m + $13m + $17m = $41m.

A Government Is Considering Undertaking a Construction Project of an Increasing