The marginal concept is important in economics because
A) it provides a convenient means of locating an optimal choice.
B) it assumes individuals operate using limited rationality.
C) it allows for economists to predict how an agent will respond to a change in their environment.
D) A and C only
E) all of the above

Question

Quizplus · Accepted Answer

The marginal concept helps identify the optimal choice since it analyzes the additional benefit and cost of each unit or increment. It also aids in predicting how individuals or agents will react to a change in their environment, which is useful in understanding market behavior and making policy decisions. It does not assume limited rationality, however, as individuals are assumed to make rational decisions based on their preferences and available information.

The Marginal Concept Is Important in Economics Because