Calculate Marginal Benefit: Point A & B | Microeconomics

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In summary, The speaker is seeking help with understanding marginal cost and marginal benefit in relation to production possibility frontiers in microeconomics. They have calculated the marginal cost at two points, but are unsure of how to find the marginal benefit without additional information such as a utility function or table with utility data.
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F.B
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i know this is not exactly where you post help questions but i really need it.
heres my questions.

I just started learning microeconomics and i am already confused. I was reading production possibility frontiers and how marginal cost and marginal benefit are related. I know that marginal cost is the slope of the PPF, and by doing this i get graph a marginal cost curve, but how do i calculate marginal benefits. I'll put some numbers.

Point A is (0, 15) and Point B is (1,14)
Marginal cost= 14-15/1-0 = -1

Now how do i find marginal benefit at these two points. I am trying to draw the marginal benefit curve.
If you need more points, then tell me and i will post them.
 
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Are you given a utility function? or a table with any utility data for a given amount of consumption?
 
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I understand your confusion about calculating marginal benefit. It is important to understand that marginal benefit is not a specific point on a graph, but rather a concept that describes the additional benefit gained from producing one more unit of a good or service. This means that marginal benefit is subjective and can vary for different individuals or firms.

To calculate marginal benefit, you would need to consider the individual or firm's preferences and willingness to pay for each additional unit of the good or service. This can be determined through consumer or producer surplus analysis, where you would compare the price of the good or service to the maximum amount the individual or firm is willing to pay for it.

In the example you provided, Point A and Point B do not provide enough information to calculate marginal benefit. To draw a marginal benefit curve, you would need to have more data points that represent different levels of production or consumption. This would allow you to plot the marginal benefit for each point and see how it changes as more units are produced or consumed.

I would recommend consulting your textbook or instructor for more information and examples on how to calculate marginal benefit in microeconomics. It is a complex concept, but with practice and more data points, you will be able to understand and apply it effectively.
 

1. What is marginal benefit?

Marginal benefit is the additional benefit or satisfaction that a person or company receives from consuming or producing one additional unit of a good or service.

2. How do you calculate marginal benefit?

To calculate marginal benefit, you need to find the change in total benefit from consuming or producing one additional unit of a good or service. This can be done by subtracting the total benefit of the previous unit from the total benefit of the current unit.

3. What is Point A and Point B in marginal benefit?

Point A and Point B are two hypothetical points on a graph that represent different quantities of a good or service. Point A is typically the starting point, and Point B is one unit ahead of Point A. These points are used to calculate the marginal benefit of consuming or producing one additional unit.

4. What is the significance of calculating marginal benefit?

Calculating marginal benefit is important in microeconomics because it helps individuals and companies make decisions about how much of a good or service to consume or produce. It allows them to determine the optimal quantity that will result in the greatest overall benefit.

5. How does marginal benefit relate to marginal cost?

Marginal benefit and marginal cost are two important concepts in microeconomics that are often compared. Marginal cost is the additional cost of producing one additional unit of a good or service, while marginal benefit is the additional benefit of consuming or producing one additional unit. In order to make an optimal decision, it is important to compare the marginal benefit to the marginal cost and choose the quantity that results in the greatest difference between the two.

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