Multiple Choice
Which principle in marginal analysis supports the idea that additional actions should be taken only if the marginal benefit exceeds the marginal cost?
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0. Basic Principles of Economics
Marginal Analysis
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following best describes marginal utility?
A
The additional satisfaction gained from consuming one more unit of a good or service.
B
The price paid for a good or service in the market.
C
The cost of producing one more unit of a good or service.
D
The total satisfaction received from consuming all units of a good or service.
Verified step by step guidance1
Understand that marginal utility refers to the change in satisfaction or benefit a consumer receives from consuming an additional unit of a good or service.
Recall that total utility is the overall satisfaction from consuming all units, while marginal utility focuses on the incremental change from one more unit.
Recognize that marginal utility is not related to the price paid or the cost of production, but rather to the consumer's subjective satisfaction.
Identify the correct definition as 'the additional satisfaction gained from consuming one more unit of a good or service.'
Confirm that the other options describe different economic concepts: price is market cost, cost of production relates to supply, and total satisfaction is total utility.
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