The following table shows the relationship between the speed of a computer's CPU and the benefits and costs. Assume that all other features of the computer are the same, i.e., CPU speed is the only source of variation. $$\begin{array} { | l | l | l | l | l | }
\hline \text { CPU Mhz } & \text { Total Benefit } & \text { Marginal Benefit } & \text { Total Cost } & \text { Marginal Cost } \
\hline 600 & \$ 1,000 & & \$ 900 & \
\hline 700 & \$ 1,500 & & & \$ 100 \
\hline 800 & & \$ 400 & \$ 1,400 & \
\hline 900 & \$ 2,200 & & \$ 1,900 & \
\hline 1,000 & \$ 2,400 & & & \$ 600 \
\hline
\end{array}$$ Choosing the 1,000 Mhz computer would be inefficient because:

Question

The following table shows the relationship between the speed of a computer's CPU and the benefits and costs. Assume that all other features of the computer are the same, i.e., CPU speed is the only source of variation. $$\begin{array} { | l | l | l | l | l | } 
\hline \text { CPU Mhz } & \text { Total Benefit } & \text { Marginal Benefit } & \text { Total Cost } & \text { Marginal Cost } \
\hline 600 & \$ 1,000 & & \$ 900 & \
\hline 700 & \$ 1,500 & & & \$ 100 \
\hline 800 & & \$ 400 & \$ 1,400 & \
\hline 900 & \$ 2,200 & & \$ 1,900 & \
\hline 1,000 & \$ 2,400 & & & \$ 600 \
\hline
\end{array}$$ Choosing the 1,000 Mhz computer would be inefficient because:

Quizplus · Accepted Answer

The marginal benefit from 900 to 1000 Mhz is $200 ($2,400 - $2,200), while the marginal cost is $600. Since the marginal cost exceeds the marginal benefit, choosing the 1,000 Mhz computer is inefficient.

The Following Table Shows the Relationship Between the Speed of a Computer's