Practice Questions
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What happens to the marginal benefit when a consumer decides to purchase an additional unit of a good, assuming the price remains constant?
The marginal benefit decreases when you buy more of something. Other options are incorrect because Some might think that buying more makes you happier...
In a competitive market, how does a consumer determine the optimal quantity of a good to purchase based on marginal benefit and market equilibrium?
Consumers look at the extra benefit they get from buying one more item. Other options are incorrect because Some might think looking at total revenue ...
In the context of market equilibrium, how does the concept of marginal benefit relate to welfare economics when determining the optimal allocation of resources?
At market equilibrium, the extra benefit from one more unit is equal to the extra cost. Other options are incorrect because Some might think that the ...
In the context of resource allocation, how does the concept of marginal benefit play a role in achieving market equilibrium through incremental analysis?
Marginal benefit helps us find the best amount to produce. Other options are incorrect because This answer suggests that less production means higher ...
In the context of diminishing returns, how does the marginal benefit of consuming an additional unit of a good change as one increases consumption, and what implications does this have for economic efficiency and trade-offs?
As you consume more of a good, the extra satisfaction you get from each additional unit usually goes down. Other options are incorrect because Some mi...
What is the marginal benefit of consuming one additional slice of pizza if the first slice provided satisfaction rated at 10 utility and the second slice provided satisfaction rated at 6 utility?
The marginal benefit is the extra satisfaction from one more slice. Other options are incorrect because This answer suggests the first slice's satisfa...
What happens to the marginal benefit when the marginal cost of producing an additional unit increases?
When the cost to make one more item goes up, the extra benefit we get from it usually goes down. Other options are incorrect because Some might think ...
If a student decides to spend an hour studying for an economics exam instead of working at their part-time job, what is the opportunity cost of studying?
The opportunity cost is what you give up when you make a choice. Other options are incorrect because Some might think the knowledge is the cost, but i...
Which of the following statements accurately describe the concept of Marginal Benefit Calculation? Select all that apply.
Other options are incorrect because This statement is misleading; This option confuses the idea of marginal benefit with price....
Marginal Benefit : Increased Consumption :: Opportunity Cost : ?
Opportunity cost is what you give up when you make a choice. Other options are incorrect because Total spending is about how much money you use; Decre...
If a consumer derives a marginal benefit of $20 from a good priced at $5, what is the marginal benefit per dollar spent?
To find the marginal benefit per dollar, divide the benefit by the price. Other options are incorrect because This answer suggests a misunderstanding ...
To maximize utility when making consumption decisions, consumers should compare the ________ of each good by dividing its marginal benefit by its price.
This shows how much benefit you get for each dollar spent. Other options are incorrect because Total benefit looks at all the good you get, not just t...
Maria has a budget of $20 to spend on snacks for a movie night. She is considering buying popcorn, candy, and chips. If the marginal benefit of the first bag of popcorn is 10 utils, the first bag of candy is 6 utils, and the first bag of chips is 8 utils, which snack should she purchase first to maximize her utility per dollar spent, assuming popcorn costs $5, candy costs $2, and chips cost $3?
Candy gives the most utility per dollar spent. Other options are incorrect because Popcorn seems appealing with 10 utils, but it costs $5; Chips provi...
When comparing two products, how should a consumer decide which one provides greater value for their money?
To find the best value, you need to look at how much benefit you get for each dollar spent. Other options are incorrect because Many people think the ...
A consumer is deciding between purchasing two goods, A and B. Good A has a marginal benefit of $30 and a price of $10, while Good B has a marginal benefit of $20 and a price of $5. Which category accurately describes the consumer's optimal choice based on marginal benefit per dollar, and why?
To find the best choice, we look at how much benefit we get for each dollar spent. Other options are incorrect because Some might think cheaper is alw...
Arrange the following steps in the correct order for calculating Marginal Benefit per Dollar to optimize spending: A) Determine the marginal benefit of each good B) Divide the marginal benefit by the price of each good C) Compare the Marginal Benefit per Dollar across goods D) Make a purchase based on the highest Marginal Benefit per Dollar
First, you find out how much extra happiness or benefit you get from each good. Other options are incorrect because This option suggests starting with...
If a consumer finds that the marginal benefit of a good decreases as they consume more units, which of the following best explains why they might continue to purchase additional units?
Consumers look at how much benefit they get for each dollar spent. Other options are incorrect because Some people think that buying more always means...
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