List the benefits of buying and caring for a pet. To determine the best level of consumption of a product, people must compare the additional benefits with the additional costs of consuming a little more or a little less. You do not have to spend all your money on one thing. You can use some money for one thing, and some for another. Marginal benefit is the change in total benefit resulting from an action.
Marginal cost is the change in total cost resulting from an action.
Explain why beyond some point they are unwilling to buy and consume an additional slice of pizza. Apply the concepts of marginal benefit and marginal cost to an environmental policy to find the optimal amount of pollution for two firms that have substantially different costs of reducing pollution. To produce the profit-maximizing level of output and hire the optimal number of workers, and other resources, producers must compare the marginal benefits and marginal costs of producing a little more with the marginal benefits and marginal costs of producing a little less. Decide how many workers to hire for a profit-maximizing car wash by comparing the cost of hiring each additional worker to the additional revenues derived from hiring each additional worker. To determine the optimal level of a public policy program, voters and government officials must compare the marginal benefits and marginal costs of providing a little more of a little less of the program's services.