Question 1

Marginal benefit is the benefit

Accepted Answer

Marginal benefit refers to the additional benefit received from consuming or producing one more unit of a good or service.

Question 2

-In the figure above, the marginal cost of producing a computer

Accepted Answer

Marginal cost increases as more units are produced due to the law of diminishing returns, which states that as production increases, the cost of producing an additional unit also increases.

Question 3

Susan likes to drink sodas. The ________ soda Susan drinks, the ________ of the last soda.

Accepted Answer

The principle of diminishing marginal utility suggests that as Susan consumes more soda, the additional satisfaction (marginal benefit) she gets from each additional soda decreases.

Question 4

-Victor currently produces nuts and bolts at point a in the figure. Victor's marginal cost of producing an additional nut is ________.

Accepted Answer

At point a, the slope of the production possibility frontier (PPF) represents the marginal cost of producing an additional nut in terms of bolts. The slope is -1, indicating that the marginal cost of producing one more nut is 1 bolt per nut.

Question 5

The principle of decreasing marginal benefit implies that the

Accepted Answer

The principle of decreasing marginal benefit states that the additional benefit from obtaining one more unit of a good or service decreases as more units are consumed. This means that each additional unit provides less satisfaction or usefulness than the previous one, eventually leading to a point where the consumer no longer wants or needs any more units. Therefore, option A is the best choice.

Question 6

Marginal cost curves slope

Accepted Answer

Marginal cost curves typically slope upward due to the principle of increasing opportunity costs, which states that as production increases, the opportunity cost of producing each additional unit also increases. This is often due to factors like the need to use less efficient resources as production expands.

Question 7

Marginal benefit curves slope

Accepted Answer

Marginal benefit curves typically slope downward due to the law of diminishing marginal utility, not because of increasing opportunity cost. This principle states that as a person consumes more of a good, the additional satisfaction (or benefit) they derive from each additional unit decreases.

Question 8

-The table above represents different points along a production possibilities curve. What is the marginal cost of moving from 2 bushels to 3 bushels of beans?

Accepted Answer

The answer of 
-The table above represents different points along...

Question 9

Marginal benefit is the benefit ________ one more unit of the good and ________ of the good increases.

Accepted Answer

Marginal benefit refers to the additional satisfaction or utility that a consumer receives from consuming one more unit of a good or service. Typically, as more of a good is consumed, the marginal benefit of consuming additional units decreases, reflecting the principle of diminishing marginal utility.

Question 10

-In the figure above, the marginal cost of the second computer is

Accepted Answer

The marginal cost of producing the second computer is the opportunity cost of producing that computer in terms of the other good, which is how many television sets must be given up to produce one more computer. From the first to the second computer, the production possibility frontier (PPF) typically shows a movement along the curve where more of one good is produced at the expense of producing less of the other good. The correct answer is determined by the slope of the PPF between the points representing the production of the first and second computers. Without the specific figure, a common principle in economics is that the marginal cost in terms of the other good increases due to the law of increasing opportunity costs. However, given the choices and assuming a typical PPF, the correct answer would be based on the specific details provided in a question scenario, which are not present here. Nonetheless, the principle remains that the marginal cost is the opportunity cost of producing one more unit of a good.

Question 11

A marginal benefit curve shows

Accepted Answer

A marginal benefit curve shows the additional benefit that a consumer receives from consuming one more unit of a good. Therefore, it shows the quantity of one good that people are willing to forgo to get another unit of another good. Choice A is incorrect because a marginal benefit curve does not necessarily indicate the efficient use of resources. Choice B is incorrect because that is a representation of a production possibilities curve, not a marginal benefit curve. Choice D is incorrect because there may or may not be increasing opportunity costs associated with a marginal benefit curve.

Question 12

The marginal benefit of a good or service

Accepted Answer

The marginal benefit of a good or service generally decreases as more is consumed, meaning each additional unit consumed provides less satisfaction or benefit than the previous unit. This is due to the law of diminishing marginal utility, which states that the more of a good or service a person consumes, the less additional benefit they receive from each additional unit consumed.

Question 13

Marginal benefit curves slope ________ and marginal cost curves slope ________.

Accepted Answer

Marginal benefit curves slope downward because as more units of a good or service are consumed, the additional benefit (or satisfaction) received from each unit tends to decrease. Marginal cost curves slope upward because as more units of a good or service are produced, the additional cost of producing each unit tends to increase.

Question 14

As a person consumes more of a good, the

Accepted Answer

The principle of diminishing marginal utility states that as a person consumes more of a good, the additional satisfaction (marginal benefit) gained from consuming one more unit of the good decreases.

Question 15

Which of the following is TRUE regarding marginal benefit? I) The marginal benefit curve shows the benefit firms receive by producing another unit of a good.
II) Marginal benefit increases as more of a good is consumed.

Accepted Answer

The marginal benefit curve typically shows the benefit consumers receive from consuming an additional unit of a good, not the benefit to firms from producing it. Additionally, marginal benefit usually decreases as more of a good is consumed due to the law of diminishing marginal utility, not increases.

Question 16

The principle of decreasing marginal benefit means that as the quantity of a good consumed

Accepted Answer

As the quantity of a good consumed increases, its marginal benefit decreases. This is because as we consume more and more of a good, each additional unit consumed provides less additional benefit or satisfaction compared to the previous unit consumed. Therefore, the principle of decreasing marginal benefit holds true.

Question 17

-In the figure above, the marginal cost of the fifth computer is

Accepted Answer

The marginal cost of the fifth computer is the opportunity cost of producing that computer, which is how many television sets must be given up to produce it. This is determined by the slope of the production possibility frontier at that point.

Question 18

The marginal benefit from a good is the amount a person is willing to pay for

Accepted Answer

Marginal benefit is the additional benefit received from consuming one more unit of a good. Therefore, the correct choice is B, which states that the marginal benefit is the amount a person is willing to pay for one more unit of the good.

Question 19

Marginal benefit is the

Accepted Answer

Marginal benefit refers to the benefit (in terms of satisfaction, pleasure, or utility) that a person receives from consuming an additional unit of a good or service. It is the extra benefit that a person gains from consuming one more unit of a good or service beyond what they have already consumed. It is an important concept in economics because it helps consumers and producers make decisions about how much of a good or service to consume or produce.

Question 20

We measure the marginal ________ of a good by what a ________ for another unit of the good.

Accepted Answer

Marginal benefit is the additional benefit received from consuming one more unit of a good. This can be measured by what a person is willing to pay for another unit of the good, which is the highest price they are willing to pay given their preferences and budget constraints.

Quiz 2: The Economic Problem