“Diminishing marginal benefit” implies that when Sally consumes one fewer unit of a good that she likes, her
marginal benefit increases.
total benefit increases.
income decreases.
Omarginal benefit decreases.
The correct answer and explanation is :
The correct answer is “marginal benefit decreases.”
Explanation:
The concept of “diminishing marginal benefit” is a principle in economics that describes how the additional satisfaction or utility (benefit) that a person derives from consuming an additional unit of a good or service decreases as more units of that good are consumed. In simple terms, the more you have of something, the less you tend to value each additional unit.
Let’s apply this to the scenario where Sally consumes one fewer unit of a good that she likes. If Sally reduces her consumption of the good, she may begin to value the remaining units of the good more highly, because the “marginal benefit” of the next unit is higher when there are fewer units available. However, this doesn’t necessarily mean that her total benefit increases—it simply means that the benefit of each remaining unit consumed becomes more significant.
Diminishing marginal benefit is closely tied to the law of diminishing returns, which suggests that as you consume more of a good, the benefit you get from each additional unit declines. For example, if Sally starts with 10 units of chocolate, the first few pieces might bring her a lot of pleasure. However, as she continues to eat more, each additional piece brings less satisfaction. If Sally consumes fewer units, she might feel like she’s getting more satisfaction from the units she does consume because they are now more scarce or valuable to her.
This principle helps explain many consumer behaviors. People often reduce their consumption of a good when the additional satisfaction they derive from it is no longer worth the cost, which reflects the decreasing marginal benefit. So, in the scenario where Sally consumes one fewer unit, the marginal benefit of consuming the remaining units decreases, not increases.
Thus, “marginal benefit decreases” is the most accurate choice because of the diminishing returns associated with consuming more of a good.