[Appendix material: calculus required] Suppose total benefits and total costs are given by B(Y) = 150Y-10Y² and C(Y) = 5Y 2. Then marginal costs are: a. 5Y. b. 10Y. c. 2.5Y. d. 25Y.

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1. Assume you must choose between two mutually exclusive alternatives: A or B. The explicit benefit you receive from alternative A, bª, is equal to $100. And, the explicit cost of choosing alternative A, c*, is $80. Also, the explicit benefit to choosing alternative B, b", is $120. What is the accounting return for choosing alternative A, r^? Given r and b", what is the explicit cost that you are willingness to pay (WTP) for alternative B, WTP"? Please include the formulas from class in your answer. How would WTPB change ifr^ increased by $5? Explain. your Using the original set of values for explicit costs and benefits, what would be your economic return to choosing alternative How does this relate to the concept of consumer surplus? if the price that you were charged was $95? Please interpret.

H13). Importance of Understanding Cost Behavior Patterns Recognizing and understanding cost behavior patterns serve multiple purposes within a company. What are at least 4 of them and explain.