📚 Learning Guide
Marginal Benefit Calculation
hard

If the marginal benefit of a good increases while its price remains constant, consumers will necessarily purchase more of that good, illustrating that marginal benefit directly dictates consumer choice regardless of budget constraints.

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Learning Path

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Choose the Best Answer

A

True

B

False

Understanding the Answer

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Answer

Marginal benefit is the extra satisfaction or value that a consumer gets from using one more unit of a good. When the marginal benefit of a good increases but its price stays the same, it means that the good is providing more value than before for the same cost. For example, if you usually enjoy a slice of pizza enough to pay $2 for it, but then you realize that the extra satisfaction you get from one more slice is worth $3, you are likely to buy that extra slice since it gives you more benefit than what you pay for it. This situation shows that consumers will often choose to buy more of a good when its perceived value rises, even if their budget does not change. Thus, marginal benefit plays a key role in influencing consumer decisions and can lead to increased purchases.

Detailed Explanation

This statement is true. Other options are incorrect because This option suggests that people will always buy more if the benefit increases.

Key Concepts

Marginal Benefit Calculation
Consumer Choice Theory
Budget Constraints
Topic

Marginal Benefit Calculation

Difficulty

hard level question

Cognitive Level

understand

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