Which of the following examples is commonly used to illustrate the concepts of marginal benefit and marginal cost in microeconomics?

• A. Selecting a major in college based on future earnings
• B. Choosing between different brands of smartphones
• C. Comparing the prices of gasoline at two stations
• D. Deciding how many slices of pizza to eat at a buffet

Answer: (D)

Verified step by step guidance

1. Understand the concepts of marginal benefit and marginal cost: Marginal benefit is the additional satisfaction or utility gained from consuming one more unit of a good or service, while marginal cost is the additional cost incurred from consuming that extra unit.
2. Identify the scenario that best illustrates a decision made at the margin, where the consumer weighs the extra benefit against the extra cost of one more unit.
3. Evaluate each example: Selecting a major involves long-term decisions and future earnings, which is less about marginal changes and more about overall outcomes; choosing between brands focuses on preferences rather than marginal analysis; comparing gasoline prices is about price differences, not marginal consumption decisions.
4. Recognize that deciding how many slices of pizza to eat at a buffet directly involves marginal analysis, as the consumer considers the benefit of one more slice versus the cost (such as price or fullness).
5. Conclude that the pizza slices example is commonly used because it clearly demonstrates the trade-off between marginal benefit and marginal cost in a simple, relatable context.