Identify the truthfulness of the following statements: I. Marginal analysis can explain why you would always choose to eat Chinese food rather than pizza.
II. Marginal analysis can explain the incremental impact of an increase in total cost when one more unit of output is produced.
A)Both I and II are true
B)Both I and II are false
C)I is true; II is false
D)I is false; II is true

Question

Quizplus · Accepted Answer

Marginal analysis does not determine absolute preferences (like always choosing Chinese food over pizza) but rather examines the benefits of incremental changes, making statement I false. Statement II is true as marginal analysis is indeed used to assess the impact of producing one additional unit of output, including changes in total cost.

Identify the Truthfulness of the Following Statements: I