Calculating Marginal Benefit: Point A & B

[F.B]

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.
If you need more points tell me and i will post them

 

[Nino MMP]

.Marginal benefit is the inverse of marginal cost. In other words, the marginal benefit at points A and B would be 1.

 

[Blueshift5]

Hi there,

Calculating marginal benefit can be a bit confusing at first, but it's an important concept in microeconomics. Let's break it down.

Marginal benefit refers to the additional benefit gained from consuming or producing one more unit of a good or service. In other words, it measures the change in total benefit when one more unit is added. In your example, it would be the additional benefit gained from producing one more unit of a good.

To calculate marginal benefit, you can use the same formula as you did for marginal cost, but instead of using the change in cost, you use the change in benefit. So for Point A and B, the formula would be:

Marginal benefit = (14-15)/(1-0) = -1

This means that for each additional unit produced, the benefit decreases by 1. In other words, the marginal benefit is decreasing as more units are produced.

If you want to find more points, you can use the same formula for any two consecutive points on the production possibility frontier. For example, if you have Point C at (2,12) and Point D at (3,10), the marginal benefit would be:

Marginal benefit = (10-12)/(3-2) = -2

This means that for each additional unit produced after Point C, the benefit decreases by 2.

I hope this helps clear up any confusion. Keep practicing and you'll get the hang of it! Good luck with your studies.