1. (Chapter 2, Question 2) The marginal benefit of adding a pound of compost is the extra revenue you earn from the additional pound of tomatoes grown. Therefore, you should continue to add more compost as long as the marginal benefit exceeds or equals the marginal cost of adding another pound of compost (50 cents). This type of problem is easily answered using a table such as the one below. Note that by adding the fourth pound of compost, you'll get 2 extra pounds of tomatoes, or 60 cents in extra revenue, which covers the 50-cent cost of the extra pound of compost. However, the fifth pound of compost gives only 1 extra pound of tomatoes, so the corresponding revenue increase (30 cents) is less than the cost of the compost. So you should add 4 pounds of compost and no more. Pounds of Pounds of Extra pounds of Extra revenue or Extra or marginal compost tomatoes tomatoes marginal benefit cost 100 120 20 $6.00 $.50 125 $1.50 $.50 128 $.90 $.50 130 $.60 $.50 131 $.30 $.50 131.5 $.15 $.50