What is meant by thinking at the margin?

What is meant by thinking at the margin?

It means to think about your next step forward. The word “marginal” means “additional.” The first glass of lemonade on a hot day quenches your thirst, but the next glass, maybe not so much. If you think at the margin, you are thinking about what the next or additional action means for you.

What is an example of marginal thinking?

For example, if you have a car factory and you want to produce one more car than you are now, and doing so requires building a second factory, then your marginal cost includes the cost of that factory and any associated equipment or personnel, as well as the cost of that car. …

What is an example of thinking at the margin in economics?

A key economic principle is that rational decision making requires thinking at the margin. An example of such rational behaviour would be deciding to drink one more beer or spending one more hour studying only if the additional benefits were greater than the additional costs. …

What kind of decisions can be made at the margin?

Choices Are Made at the Margin. Economists argue that most choices are made “at the margin.” The margin is the current level of an activity. Think of it as the edge from which a choice is to be made. A choice at the margin is a decision to do a little more or a little less of something.

Are opportunity costs real and do they have an effect on decision making?

Every time you make a choice, you’re weighing the opportunity cost of that action. Opportunity costs extend beyond just the monetary costs of a decision, but it includes all real costs of making one choice over another, including the loss of time, energy and a derived pleasure/utility.

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Which of the following would be an example of a good Weegy?

The following would be an example of a good: a car.

What is the basic premise of an opportunity cost quizlet?

Terms in this set (6) Opportunity Cost is when in making a decision the value of the best alternative is lost. e.g. choosing electricity over gas, the opportunity cost is what you’ve lost from not picking gas. Firms take decision about what economic activity they want to be involved in.

What is the meaning of opportunity cost quizlet?

opportunity cost. the most desirable alternative given up as the result of a decision. Only $3.99/month. thinking at the margin. the process of deciding whether to do or use one additional unit of some resource.

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