What is the Principal of Optimization at the Margin? Explain with an example

What will be an ideal response?

The Principal of Optimization at the Margin states that an optimal alternative has the property wherein moving to it makes the decision maker better off, and moving away from it makes the decision maker worse off. For example, if an individual has to choose between alternative apartments, she will choose moving toward the apartment that lowers her total cost, and moving away from the apartment that increases her total cost. Such an apartment will be an optimal choice according to the Principal of Optimization at the Margin.

Economics

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Keynesians believe a change in the money supply cannot lower the unemployment rate.

a. true b. false

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A Ponzi scheme can only succeed if the investors in the scheme believe that something is preventing:

A. Diversification B. Arbitrage C. Pooling D. Risk premium

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