Question

Water is necessary for life. Is the marginal benefit of a glass of water large or small?

Short answer

A glass of water has a small marginal benefit.

Step-by-step solution

Meaning of marginal benefit

The marginal benefit refers to the additional benefit that occurs due to the consumption or production of an additional unit of a good or service. It measures how a unit increase affects the utility of a consumer or producer.

For example, if a decrease in the price of a good from $4 to $3 results in an increase in the quantity supplied from 20 to 40 units, the marginal benefit is the increase in total revenue from $80 to $120, that is $40.

Reasons for the small marginal benefit of a glass of water 

The marginal benefit derived at each level of consumption or production depends on the previous level of consumption or production. If the consumed or produced quantity is already high, the marginal benefit is low for the next unit consumption/production. Thus, at a low level of consumption, a glass of water will have greater marginal benefit than at a high level due to the need for more. Once satisfied, the marginal benefit decreases sharply.

However, in a general sense, a glass of water has small marginal utility or benefit due to its abundant nature. It is available easily for consumption, and the marginal cost of providing extra is very low. This decreases the additional benefit.