Question

Marginal benefit generally:

increases as consumption increases.
reflects how much people are willing to pay for items that are hard to find.
decreases as consumption increases
None of these choices are correct.

Answer 1

decreases as consumption increases

Step-by-step explanation:

Marginal benefit represent the increase in satisfaction as you consume more amount of a same product. Marginal benefit tend to decrease as the consumption rises.

For example, let's say you're really thirsty on a hot afternoon. So you opened a fridge and drink a bottle of Coke. The first bottle felt great. But you're still feeling thirsty, so you decided to open another bottle. 2 Bottles felt Even better.

So far, you're feeling satisfied by consuming more coke. But imagine whether you're still feeling the same satisfaction when you keep consuming the coke all the way to the 5th bottle. At that point, it's probably a little bit too much.

As your consumption of the coke increase, the marginal benefit you get from drinking the coke decreases.