#1
What does marginal analysis examine?
The effects of changes in variables on a decision
ExplanationExamines effects of variable changes on decisions.
#2
In economics, what does 'marginal' refer to?
The additional or incremental
ExplanationRefers to additional or incremental changes.
#3
What does the term 'marginal' mean in economics?
Additional or incremental
ExplanationMeans additional or incremental changes.
#4
Which of the following best describes the concept of marginal analysis?
Analyzing the effects of small changes in variables on decision-making
ExplanationAnalyzing effects of small variable changes.
#5
Which concept is central to marginal analysis?
Opportunity cost
ExplanationOpportunity cost is central to marginal analysis.
#6
What is the formula for marginal cost?
Change in total cost divided by change in quantity
ExplanationMarginal cost formula: ∆Total cost / ∆Quantity.
#7
What is the relationship between marginal cost and marginal benefit at the optimal level of activity?
Marginal cost equals marginal benefit
ExplanationAt optimal level, marginal cost = marginal benefit.
#8
Which principle suggests that individuals will continue to consume goods or services until the marginal utility of each good or service equals its price?
Equimarginal principle
ExplanationIndividuals consume until marginal utility = price.
#9
In production analysis, what does the marginal product of labor represent?
The additional output produced by hiring one more unit of labor
ExplanationMarginal product of labor: additional output by one more unit.
#10
What does the law of diminishing marginal returns state?
As more of a variable input is added to a fixed input, marginal product eventually increases at a decreasing rate.
ExplanationIncreasing variable input decreases marginal returns.
#11
Which of the following is NOT a limitation of marginal analysis?
It is not applicable in market equilibrium analysis
ExplanationNot applicable in market equilibrium analysis.
#12
What is the primary goal of profit-maximizing firms according to marginal analysis?
To maximize the difference between total revenue and total cost
ExplanationMaximize difference between total revenue and cost.
#13
What concept in economics suggests that individuals face trade-offs at the margin?
Marginalism
ExplanationIndividuals face trade-offs at the margin.
#14
Which of the following is NOT a characteristic of marginal analysis?
It considers only quantitative factors.
ExplanationMarginal analysis considers qualitative factors.
#15
What does the marginal revenue curve depict in microeconomics?
The relationship between marginal cost and marginal revenue
ExplanationDepicts relationship between marginal cost and revenue.
#16
In what situation is marginal cost at its lowest point?
When total cost is at its minimum
ExplanationMarginal cost lowest when total cost is minimum.