Your neighbor is mowing her yard one afternoon when she stops to have some lemonade.She drinks one glass and is now deciding whether or not to have a second glass.This is an example of _____ analysis.
A)marginal
B)benefit
C)cost
D)equilibrium

Question

Quizplus · Accepted Answer

Marginal analysis involves comparing the benefits and costs of consuming one more unit of a good or service. In this case, the neighbor is considering the marginal benefit of having a second glass of lemonade (the additional satisfaction or enjoyment she would receive from the second glass) with the marginal cost (the effort required to make the decision and pour another glass, and any negative effects such as excess sugar or calories). Since we do not know the specific values of these factors, we cannot determine the best choice. However, the neighbor's decision will be based on her comparison of the marginal costs and benefits.

Your Neighbor Is Mowing Her Yard One Afternoon When She