with the average value in conjunction with benefits of the alternative interventions and compares
The new intervention is always compared with the existing one, and the average cost is not
the most appropriate comparison other than the marginal costs of the new intervention (Palmer &
Marginal Cost v Marginal Benefit
Apply the concept of marginal cost and marginal benefit to real-world decisions. Provide
two examples of recent choices you made in which you, either explicitly or implicitly,
weighed marginal cost and marginal benefit
I have a friend of mine who currently drive a Honda Civic. However, each week he puts
approximately 200 miles on his car because of where he works (Schob, 2013). However, in his
town, there are three various types of fuel available at the shell station fuel pump namely shell v-
power, regular Ethanol and Ethanol. In that case, proper costs about 2.1 dollars per gallon. Plus
Ethanol expenses about 2.3 dollars, and finally, shell v-power costs 2.6 dollars. He usually uses
plus ethanol in his Honda to get the best highway mileage. As an illustration, the cost decisions
are the main reason why he uses this type of fuel (Schob, 2013).
There are several decisions to be made by the automobile owners. However, my friend
weighed the marginal benefits of the type of fuel needed for his car.
The other example of weighing marginal costs and the benefit is that my friend and I
work and at the same time study together. However, due to the fixed schedule we have, it is
always hard to cook every week. In that case, it would make more economic sense because we
are only two people. Accordingly, after working the whole day, it benefits us to eat out and allow
us to have more time for our busy timeframe (Schob, 2013).