Question

Phillip is trying to lose weight at the UQ Gym. He spends $30 on a personal trainer each session. Phillip gains $100 of benefit from attending 3 sessions and $140 of benefit from attending 4 sessions. Which of the following statement(s) are true:

a.The marginal benefit of attending the fourth session is $40
b.The marginal cost of the fourth session is $30
c.There is insufficient evidence to determine the marginal benefit from the third session of personal training.
d.Phillip should not attend the fourth session because the marginal benefit is greater than the marginal cost.

Answer 1

The marginal benefit of attending the fourth session is $40, and the marginal cost of the fourth session is $30.

Step-by-step explanation:

To determine the true cost and benefit of attending each personal training session, we need to consider the concept of marginal cost and marginal benefit. The marginal cost is the additional cost incurred by attending an additional session, which in this case is $30. The marginal benefit is the additional benefit gained from attending an additional session. In the given data, we can calculate the marginal benefit of attending the fourth session by subtracting the benefit gained from attending 3 sessions ($100) from the benefit gained from attending 4 sessions ($140), which gives us a marginal benefit of $40.

Therefore, the correct statements are:

• a. The marginal benefit of attending the fourth session is $40
• b. The marginal cost of the fourth session is $30