Unit 1: Marginal Analysis

What is opportunity cost?

• Cost of my second choice

• Cost of my next best alternative

• Total cost of my alternative choices

• A & B

What is Marginal Cost?

• cost of my second choice

• additional cost of the use or consumption of another Good or Service

• cost of a good or service

• cost of my first choice

I bought a cup of Starbucks coffee for $1.50. I decided to have another cup. What was my cost?

• My opportunity cost was $1.50

• My Marginal Cost was $1.50

• There was no marginal or opportunity cost

Amount of personal satifisfaction or pleasure one gets from consuming a good or service

• Utility

• Marginal Utility

• Marginal costs

• Negative Utility

The additional benefit of the use/comsumption of an additonal good or service

• Marginal benefit

• Marginal cost

• Utility

The additional costs or the use/consumption of an Good or Service

• Marginal benefit

• Marginal cost

• Negative Utility

According to the economic decision rule, you should continue to do an action/activity or make a purchase

• if MC>MB

• if MB>MC

• if MU<NU

What is the maximization of marginal benefit and marginal cost?

• MB=MC

• MB>MC

• MB=0

How many hours should this person spend studying economics?

• 1

• 2

• 3

• 4