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Refer to the accompanying table below. The marginal benefit of the 5th unit of
activity is:
Units of Activity
0
1
2
3
4
5
6
Total Cost
$0
$30
$40
$60
$100
$150
$210
Total Benefit
$0
$100
$160
$190
$210
$220
$225
O A) $44
B) $50

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Answer:

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The marginal benefit of the 5th unit of activity is $50.

  • The marginal benefit refers to the change in the overall benefit at the time when the extra unit of the commodity should be consumed.

The following formula should be used:

= Total benefit of 5th unit - Total benefit of 4th unit

= $150 - $100

= $50

Therefore we can conclude that the marginal benefit of the 5th unit of activity is $50.

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