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This posting addresses marginal benefits and marginal costs.

Marginal benefits and marginal costs

A. Capture the way total benefits and total costs change as the amount of an activity changes just a little bit
B. Are constant, regardless of the amount of an activity that is pursued
C. Tend to increase as a decision maker does more of an activity
D. Tend to increase as a decision maker does more of an activity

The marginal benefit of an action

A. Equals the additional benefit produced by extra units of X and tends to decrease as X increases
B. Equals the additional benefit produced by the total units of X and tends to increase as X increases
C. Equals the additional benefit produced by the total units of X and tends to decrease as X increases
D. Equals the additional benefit produced by extra units of X and tends to increase as X increases

Solution Preview

1. The correct answer is A.

The main advantage of a marginal benefit and marginal cost analysis is that it shows the changes in the benefits and costs with varying degrees of activity. Management changes the ...

Solution Summary

The solution provides the correct answers to multiple choice questions regarding marginal benefits and marginal costs. References are also provided.

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