Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
They should purchase the good if the marginal benefit exceeds the marginal cost.
B
They should purchase the good regardless of marginal costs.
C
They should avoid purchasing if any cost is involved.
D
They should always purchase the maximum quantity available.
Understanding the Answer
Let's break down why this is correct
Answer
In marginal analysis, a rational consumer looks at the additional benefit they get from consuming one more unit of a good compared to the additional cost they incur to get that unit. This means they will keep consuming more of a good as long as the extra satisfaction, or utility, from that unit is greater than the price they have to pay for it. For example, if you are buying slices of pizza, you would consider how much you enjoy each additional slice. If the satisfaction from the third slice is worth more to you than the price of that slice, it makes sense to buy it. However, if the enjoyment from the fourth slice is less than the cost, a rational consumer would decide not to buy it.
Detailed Explanation
A smart buyer looks at the extra benefit of getting one more item. Other options are incorrect because This idea suggests buying no matter the cost; Thinking you should never buy if there's a cost is too strict.
Key Concepts
resource allocation
rational behavior
Topic
Marginal Analysis
Difficulty
medium level question
Cognitive Level
understand
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