Marginal analysis refers to:
A) points that lie on the budget set
B) costs that were incurred in the past and cannot be recovered, and thus should not affect current decisions
C) comparing the benefits and costs of choosing a little more or a little less of a good
D) whatever must be given up to obtain something that is desired

Question

Quizplus · Accepted Answer

Marginal analysis involves evaluating the additional benefits and costs of consuming or producing one more unit of a good or service. This helps individuals and firms make rational decisions about how much more or less of a good to consume or produce. Therefore, option C correctly describes marginal analysis. Options A, B, and D are incorrect because they do not accurately describe marginal analysis.

Marginal Analysis Refers To