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Daniel is a terrible manager. Noticing the low morale and high attrition rate in Daniel’s team, Daniel’s employer forces him to undertake Management-360 training. The following table depicts the total benefits to Daniel’s employer for different hours of training taken:HoursTotal Benefits ($)0011502260335044205480Which of the following price of training is consistent with a choice of 2 hours of training?$80/hour$100/hour$120/hourNone of the above

Question

Daniel is a terrible manager. Noticing the low morale and high attrition rate in Daniel’s team, Daniel’s employer forces him to undertake Management-360 training. The following table depicts the total benefits to Daniel’s employer for different hours of training taken:HoursTotal Benefits ()0011502260335044205480Whichofthefollowingpriceoftrainingisconsistentwithachoiceof2hoursoftraining?)0011502260335044205480Which of the following price of training is consistent with a choice of 2 hours of training?80/hour100/hour100/hour120/hourNone of the above

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Solution

To determine the price of training that is consistent with a choice of 2 hours of training, we need to consider the marginal benefit of the training. The marginal benefit is the additional benefit received from consuming one more unit of a good or service.

Step 1: Calculate the marginal benefit of the second hour of training.

The total benefit of 1 hour of training is 150.Thetotalbenefitof2hoursoftrainingis150. The total benefit of 2 hours of training is 260. Therefore, the marginal benefit of the second hour of training is 260260 - 150 = $110.

Step 2: Compare the marginal benefit with the price.

The price of the training should be equal to or less than the marginal benefit for it to be worth it.

So, we have the equation Price=Price = 110.

Looking at the given options, none of them match the value of $110. Therefore, the answer is: None of the above.

This problem has been solved

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