Question

FOR THIS QUESTION CAN BE MULTIPLE CHOICES NOT JUST ONE, I WAS THINKING IN OPTION B AND MAYBE D BUT NOT SURE :/

QUESTION 2 The UQ Union is considering two expenditure options. It can either buy 20,000 ice-creams (each costing $2.50) to distribute to UQ students or it can construct a skate park costing $50,000 for students to freely use. There are approximately 50,000 students at UQ and each student values an ice-cream (and every additional ice-cream) at $2.50 and the use of the skate park at $2.50. Which of the following statements are true The total summed MB for the skate park is $50,000. The total summed MB for the skate park is $125,000 when considering all students. The total summed MB for ice-creams is $125,000 and the MC is $50,000, so choosing this option would not make economic sense For each ice-cream consumed, the MB equals the MC.

Answer 1

Marginal benefit for the skate park is $2.50. There are 50000 students. Thus, the total summed MB will be $2.50*50000 = $125,000.Therefore, option A is not true and option B is true.

Marginal benefit for the icecream is $2.50. The UQ Union is considering to buy only 20000 icecreams, but there are 50000 students. Thus, the total summed MB will be $2.50*20000 = $50000. Therefore, for each incecream consumed, the MB equals the MC. Option C is false and option D is true.