Practice prompt · Q:economics-and-market-foundations/identify-marginal-benefit-001

Identify benefit attributable to one increment

Separate the expected benefit of an added control step from total and average benefits of the existing process.

Updated Aug 7, 2026 Review due Nov 7, 2026

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A control process produces $32,000 of total expected loss avoidance. Adding one targeted exception review raises total expected loss avoidance to $40,000. What is the marginal benefit of the added review?

Choose the best answer. a $8,000, the added expected loss avoided when total expected benefit rises from $32,000 to $40,000. b $40,000, because all benefit after the change belongs to the added step. c $20,000, the average of the before and after totals.

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Answer: a

Choice a. The marginal benefit is the with-increment total of $40,000 less the baseline total of $32,000, or $8,000 under the stated expected-value assumptions.