In economics, marginal analysis:
A) has no practical applications or real-world uses.
B) eliminates incorrect decisions and bad choices.
C) involves comparing the additional costs and additional benefits of an activity.
D) involves examining only the total costs and total benefits of an activity.
E) guarantees an incorrect decision.

Question

Quizplus · Accepted Answer

Marginal analysis involves examining the additional costs and benefits of an activity, which helps in making the most efficient decision. This analysis allows for the comparison of the incremental cost of producing an additional unit of output against the additional benefits generated. Therefore, it helps eliminate incorrect decisions and bad choices.

In Economics, Marginal Analysis