What does making decisions "at the margin" mean?
a. that people evaluate how easily a decision can be reversed if problems arise
b. that people make those decisions that do not impose a marginal cost
c. that people compare the marginal costs and marginal benefits of each decision
d. that people always calculate the marginal dollar costs for each decision
Ans: c. that people compare the marginal costs and marginal benefits of each decision
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The inflation rate in Genovia has been rising constantly. What can the central bank of the country do to control inflation?
What will be an ideal response?
When strategic interactions are important to pricing and production decisions, a typical firm will
a. set the price of its product equal to marginal cost. b. consider how competing firms might respond to its actions. c. generally operate as if it is a monopolist. d. consider exiting the market.