Question

A person should consume more of something when its marginal: cost equals its marginal benefit. cost exceeds its marginal benefit. benefit is still better. benefit exceeds its marginal cost.

Answer 1

Choice (D) is the most correct. When the marginal benefit (or utility) exceeds the marginal cost, then a person would gain from consuming the good or service. However, this only continues to the point where marginal utility is increasing. When the marginal utility starts to decrease (or fall below the marginal costs), consumption should cease.