No Bull Economics Lessons

Macroeconomics & Microeconomics Concepts You Must Know

Basic Economic Concepts (8 of 10)

Question 8:
Assume that George buys an unlimited data plan for his cell phone that enables him to use the Internet as often as he desires in a given month. Prior to this purchase, George browsed the Web several times a day. However, in this case he might become a "data hog" with an unlimited plan. Using a marginal cost and marginal benefit analysis, we can determine that George will use the Internet feature until his marginal benefit

A.  becomes zero.
B.  is less than marginal costs.
C.  exceeds marginal costs.
D.  becomes negative.

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Correct Answer: A, becomes zero. With an unlimited data plan, marginal costs are zero. George will use the data plan until his marginal benefit becomes 0 (MB = MC).