Question

Komal has a computer that she uses for school and work, it cost $2000 whe

she bought it, but it is getting old. She has taken it in at the beginning of the
year and got it repaired for $200. A few months later she discovered anothe
problem that will cost $800 to fix. She decided last week that she wanted to
keep the computer and she will pay for the repair.
For Komal, her marginal benefit of the new repair is at least $1000
Select one:
O a. True
O b. False

Answer 1

The statement about Komal's marginal benefit of repairing her computer being at least $1000 is false, as marginal benefit is the additional benefit from consuming one more unit of a good, not just the cost of a repair.

Step-by-step explanation:

The statement 'For Komal, her marginal benefit of the new repair is at least $1000' is false.

Marginal benefit is the additional benefit received from consuming one more unit of a good or service.

Since Komal's repair costs are $800 and since the statement claims that her marginal benefit is at least $1000,

it implies that the total value Komal places on the repaired computer is at least $1800 ($1000 marginal benefit plus the $800 repair cost).

However, this is less than the $2000 she originally paid for the computer, not accounting for the previous $200 repair.

Therefore, unless the repaired computer's value to Komal exceeds the original purchase price plus repair costs, her marginal benefit would be less than the cost of the repair, making the statement false.