Marginal analysis involves:
A)comparing the total benefits of all actions to the total costs incurred as a result of those actions.
B)abstract thinking, which is never actually utilized by consumers when making purchasing decisions.
C)holding all other variables constant when isolating the relationship between two variables.
D)comparing the additional benefit from an action to the additional cost.

Question

Marginal analysis involves:
A)​comparing the total benefits of all actions to the total costs incurred as a result of those actions.
B)​abstract thinking, which is never actually utilized by consumers when making purchasing decisions.
C)​holding all other variables constant when isolating the relationship between two variables.
D)​comparing the additional benefit from an action to the additional cost.

Quizplus · Accepted Answer

Marginal analysis compares the additional benefit gained from an action to the additional cost incurred, making option D the correct answer. By evaluating the marginal benefit and marginal cost of each additional unit, decision-makers can determine the optimal level of output or consumption. This approach can help in making informed decisions about whether to continue, reduce or increase the production or consumption of a product or service.

Marginal Analysis Involves