Which term describes the extra benefit of producing one more unit?

Which term describes the extra benefit of producing one more unit?

• A. Needs
• B. Marginal benefit
• C. Capitalism
• D. Wants

Answer: (B)

Marginal analysis looks at the value of producing one more unit. The extra benefit you gain from that additional unit is called the marginal benefit. This concept guides decisions by comparing the marginal benefit to the marginal cost of producing that unit: if the benefit exceeds the cost, it makes sense to produce more; if not, production should stop. The other terms don’t fit because needs and wants describe desires, not incremental value, and capitalism is an economic system, not a measure of the extra benefit from one more unit.

Marginal analysis looks at the value of producing one more unit. The extra benefit you gain from that additional unit is called the marginal benefit. This concept guides decisions by comparing the marginal benefit to the marginal cost of producing that unit: if the benefit exceeds the cost, it makes sense to produce more; if not, production should stop. The other terms don’t fit because needs and wants describe desires, not incremental value, and capitalism is an economic system, not a measure of the extra benefit from one more unit.