Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Marginal analysis helps determine the optimal number of study sessions by comparing additional benefits to additional costs.
B
Marginal analysis is only useful when costs are fixed and do not change with increased activity.
C
The goal of marginal analysis is to maximize total costs incurred during a decision-making process.
D
A decision is optimal when the marginal benefit equals the marginal cost.
E
Marginal analysis can be applied to both personal and business financial decisions.
Understanding the Answer
Let's break down why this is correct
Answer
Marginal analysis is a method used in decision-making to evaluate the additional benefits and costs of a choice. It helps people determine whether the gain from doing something is worth the expense or effort involved. For example, if a student considers studying for an extra hour, they would weigh the benefit of potentially getting a better grade against the cost of losing an hour of free time. If the expected improvement in their grade is greater than the value of their lost free time, then marginal analysis would suggest that studying longer is a good decision. This approach allows individuals to make informed choices by focusing on the impact of small changes rather than just overall outcomes.
Detailed Explanation
Marginal analysis helps find the best choice when the extra benefit of something equals the extra cost. Other options are incorrect because This option suggests that marginal analysis is only about study sessions; This statement limits marginal analysis to fixed costs.
Key Concepts
Marginal Analysis
Decision-Making
Resource Allocation
Topic
Understanding Marginal Analysis
Difficulty
medium level question
Cognitive Level
understand
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