Marginal Cost and Marginal Benefit recap

What is marginal cost?

• the change in profit resulting from an action

• is the change in total benefit resulting from an action

• is the change in total cost resulting from an action

• is the change in your options resulting from an action

What does effective decision making require?

• wisdom

• comparing your expenses and your income for each choice

• comparing the additional costs (marginal costs) and additional benefits (marginal benefits) for each choice.

• comparing additional revenue and additional profits for each choice

What is another way to define marginal cost?

• Gains/Positve

• Goods/Services

• Cost/Lose

• Income/Revenue

What is another way to define marginal benefit? (Could be more than one answer)

• Positive

• Cost

• Gains

• Purchases

Effective decision-making requires comparing the single cost (marginal cost) and single benefit (marginal benefit) for each choice.

• True

• False

Marginal cost is the small but measurable change in the expense to the business if it produces one additional unit.

• True

• False

Marginal benefit is a large, but measurable, change in a consumer's advantage if they use an additional unit of a good or service.

• True

• False

A consumer sees a buy one get one half off sale for glasses. The first pair of glasses are $300. The second pair will be $150. The glasses cost $175 each to make. Is this marginal cost or marginal benefit?

• Marginal Benefit

• Marginal Cost

A consumer walks into a gaming store. The consumer would like to purchase Madden NFL 23. Madden NFL 23 is $70. The manager tells the consumer that if another game is purchased she will sell it to them for $35. Each game cost $25 to make. Is this marginal cost or marginal benefit?

• Marginal Benefit

• Marginal Cost

You made a good decision if:

• Marginal cost is greater than marginal benefit

• marginal benefit is less than marginal cost

• Marginal benefit is greater than marginal cost

• if you listened to Coach Dent