Question

Select all that apply. Select all the items involved in marginal analysis. calculating the marginal cost of a choice choosing the option that makes you worse off randomly making a decision figuring out the marginal benefit of an alternative

Answer 1

All of the items involved in marginal analysis include: calculating the marginal cost of a choice and figuring out the marginal benefit of an alternative. The incorrect options are making random decisions or choices and making a decision or choice that would not be profitable because it is random and uncalculated. Calculating the marginal cost of a choice and figuring out the marginal benefit of an alternative are the correct choices because marginal analysis is looking at the benefits and costs of an activity. This is all to the benefit of the company or individual. With that in mind, you would not make a random selection and you would not choose the option that would make you worse off. Both of these would either negate the process of analysis by making a random choice or cause you to make a decision that is harmful. Marginal analysis is designed to help you make the best choice by being deliberate and goal oriented. You are trying to figure out what the benefits are of changing costs or quantity. Another way of thinking of this is, how do you decrease cost and increase benefit? Therefore, you would need to make calculations of cost and you must figure out the benefit of other options. Calculating the cost will give you a breakdown of which option is the cheapest. Figuring out the benefit of options will help you determine the overall benefit of a choice. When you compare cost and benefit, you are conducting marginal analysis.

Answer 2

calculating the marginal cost of a choice 
figuring out the marginal benefit of an alternative 
A&D
first and last option