- 1 What does it mean to make decisions at the margin?
- 2 Which decision is an example of a person deciding at the margin?
- 3 What information is needed to make a decision at the margin quizlet?
- 4 What does making optimal decisions at the margin require?
- 5 Why do individuals make decisions at the margin?
- 6 What is the difference between a trade off and an opportunity cost?
- 7 Are all decisions made at the margin?
- 8 What is the most desirable alternative given up?
- 9 How do costs and benefits affect decisions?
- 10 How does opportunity cost affect decision making quizlet?
- 11 What does it mean to think at the margin quizlet?
- 12 Why does every decision involve a trade off?
- 13 What does making how much decisions involve?
- 14 Why do all decisions involve an opportunity cost?
What does it mean to make decisions at the margin?
Thinking at the margin means you are thinking about using one unit more, or one unit less. Making a Decision at the Margin. When deciding whether or not to study students apply the concept of opportunity cost: If you study you will do better on the test but will have to miss the football playoff game.
Which decision is an example of a person deciding at the margin?
The BEST example of making a choice at the margin is whether to: quit your job.
What information is needed to make a decision at the margin quizlet?
To make good decisions on the margin, you must weigh marginal costs against marginal benefits. The marginal cost is the extra cost of adding one unit such as sleeping an extra hour or building one extra house. The marginal benefit is the extra benefit of adding the same unit.
What does making optimal decisions at the margin require?
Making optimal decisions “at the margin” requires: weighing the costs and benefits of a decision before deciding if it should be pursued.
Why do individuals make decisions at the margin?
When individuals make decisions, they do so by looking at the additional cost and benefit of the decision. The cost or benefit of the single decision is called the marginal cost or the marginal benefit. In theory, individuals will only choose an option if marginal benefit exceeds marginal cost.
What is the difference between a trade off and an opportunity cost?
An opportunity cost refers to the gain which was lost but could have been made because of wrong decision making. A trade-off, however, does not compute the gain or loss but is based on factors such as choice or time.
Are all decisions 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.
What is the most desirable alternative given up?
The most desirable alternative given up as a result of a decision is known as opportunity cost. Trade-offs are all the alternatives that we give up whenever we choose one course of action over others.
How do costs and benefits affect decisions?
Understanding Cost-Benefit Analysis The outcome of the analysis will determine whether the project is financially feasible or if the company should pursue another project. In many models, a cost-benefit analysis will also factor the opportunity cost into the decision-making process.
How does opportunity cost affect decision making quizlet?
How does opportunity cost affect decision making? -Every time we choose to do something, like sleep in late, we are given up the opportunity to do something less, like study an extra hour for a big test. The most desirable alternative given up as the result of a decision.
What does it mean to think at the margin quizlet?
the idea that people make decisions after thinking about the costs and benefits of adding or subtracting more or less units of time, money, effort etc.
Why does every decision involve a trade off?
Every decision involves trade-offs because every choice you want results in picking it over something else. You can’t always get what you want, like having two things. Opportunity cost means choosing the better one of two ideas. There will always be an alternative; what could have happened instead.
What does making how much decisions involve?
Making “how much” decisions involves. determining the additional benefits and the additional costs of that activity. The extra cost associated with undertaking an activity is called. marginal cost.
Why do all decisions involve an opportunity cost?
The other other alternatives in that decision are the trade-offs. Therefore, every decision involves trade-offs. Opportunity cost is the most desirable alternative given up as the result of a decision. It is important because it creates opportunities and variation in the economy.