Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Total cost
B
Marginal benefit
C
Average cost
D
Fixed cost
Understanding the Answer
Let's break down why this is correct
Answer
The primary consideration when making a decision at the margin in economics is to compare the additional benefits of an action to the additional costs it brings. This means you look at how much more you gain from doing something, like producing one more unit of a product, and weigh that against how much it will cost you to do it. For example, if a bakery considers baking one more cake, they should think about how much money they will earn from selling that cake compared to the cost of ingredients and labor. If the extra earnings are higher than the extra costs, then it’s a good choice to bake that cake. In short, the goal is to make decisions that maximize benefits while keeping costs in check.
Detailed Explanation
When making choices, we look at the extra benefit we get from a decision. Other options are incorrect because Some might think total cost matters most; Average cost can seem important, but it averages all costs.
Key Concepts
marginal benefit
Topic
Finding Optimal Choices
Difficulty
easy level question
Cognitive Level
understand
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