Marginal Analysis Flashcards
1
Q
What is marginal analysis?
A
The analysis of the benefit or cost of ‘one more thing’
2
Q
What principle is based on marginal analysis and what must be true for an economically sustainable decision to be made in relation to marginal analysis?
A
The principle of decreasing marginal benefit. For a decision to be made economically, the marginal benefits must be greater than the marginal cost.
