People make decisions at the margin. Thus, when deciding whether to purchase a second car, they would compare
A) the total benefits expected from two cars with the costs of the two cars.
B) the additional benefits expected from a second car with the total cost of the two cars.
C) the dollar cost of the two cars with the potential income that the two cars will generate.
D) the additional benefits of the second car with the additional costs of the second car.

Question

Quizplus · Accepted Answer

People make decisions at the margin, meaning they consider the additional benefits and costs of a particular choice. In this case, they would compare the additional benefits of having a second car (such as increased convenience, flexibility, and potentially better access to job opportunities) with the additional costs of purchasing and maintaining a second car (such as the cost of fuel, insurance, and maintenance). By weighing these additional benefits and costs, they can make an informed decision about whether the marginal benefits of having a second car outweigh the marginal costs.

People Make Decisions at the Margin