New 55% Off on All Courses - Enroll Now! Click Here

    Question

    If marginal benefit producing apples is greater than

    marginal cost associated with it, then a rational choice involves
    A producing more or less, depending on the benefits of producing oranges Correct Answer Incorrect Answer
    B production more of apples Correct Answer Incorrect Answer
    C no more of producing apples Correct Answer Incorrect Answer
    D producing less of apples Correct Answer Incorrect Answer

    Solution

    When the marginal benefit of producing an additional unit of a good (in this case, apples) is greater than the marginal cost of producing it, a rational producer will increase production to maximize profit or utility. The producer should continue to produce more apples until the marginal benefit equals the marginal cost. This is a fundamental principle in economics: as long as the benefit of producing an additional unit exceeds its cost, production should continue to increase.

    Practice Next