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Multiple Choice
The marginal benefit of an activity can be found by calculating the change in:
A
total cost resulting from a one-unit increase in the activity
B
total benefit resulting from a one-unit increase in the activity
C
fixed cost associated with the activity
D
average benefit per unit of the activity
Verified step by step guidance
1
Understand the definition of marginal benefit: it is the additional benefit received from consuming or engaging in one more unit of an activity.
Recognize that marginal benefit is calculated by finding the change in total benefit when the quantity of the activity increases by one unit.
Express this mathematically as: \(\text{Marginal Benefit} = \Delta \text{Total Benefit} = \text{Total Benefit at } Q+1 - \text{Total Benefit at } Q\) where \(Q\) is the current quantity of the activity.
Note that marginal benefit is not related to total cost, fixed cost, or average benefit per unit, but specifically to the incremental change in total benefit.
Conclude that the correct way to find marginal benefit is to focus on the change in total benefit resulting from a one-unit increase in the activity.