The marginal principle states that "we should increase the level of an activity as long as
A) its marginal benefit exceeds it marginal cost."
B) its marginal cost exceeds its marginal benefit."
C) its total benefit exceeds its total cost."
D) its total cost exceeds its total benefit."

Question

Quizplus · Accepted Answer

The marginal principle involves comparing the marginal benefit (the additional benefit received from one more unit) and marginal cost (the additional cost incurred from one more unit) of an activity. If the marginal benefit is greater than the marginal cost, it is worthwhile to increase the activity level, as each additional unit provides a net benefit. Therefore, choice A is correct.

The Marginal Principle States That "We Should Increase the Level