People make decisions at the margin.Therefore,when deciding whether to purchase a second car,they would compare:
A) the dollar cost of having two cars with the potential income the two cars may generate.
B) the additional benefits expected from a second car with the total cost of the two cars.
C) the additional benefits expected from a second car with the additional costs of the second car.
D) None of the answers is correct.

Question

Quizplus · Accepted Answer

People make decisions at the margin, meaning they only consider the additional benefits and costs of a decision. When deciding on whether to purchase a second car, they would compare the additional benefits expected from having a second car with the additional costs of owning a second car. Option C appropriately captures this comparison. Option A does not consider the costs of owning two cars, while option B considers only the additional benefits without considering the total costs. Option D is not correct because one of the other options is correct.

People Make Decisions at the Margin