Marginal Analysis Comparing benefits and costs. Marginal – means “extra, additional, one more” Marginal Cost (MC) – What does it cost to go to the next level or to get one more item? Marginal Benefit (MB) – What pleasure or “utility” do you get out of the next level or item? Incentive ◦ Why do we act? ◦ We do it when MB is greater than or equal to MC. The Economic Way of Thinking
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Marginal Analysis Comparing benefits and costs. Marginal – means “extra, additional, one more” Marginal Cost (MC) – What does it cost to go to the.
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Marginal Analysis Comparing benefits and costs. Marginal – means “extra,
additional, one more” Marginal Cost (MC) – What does it
cost to go to the next level or to get one more item?
Marginal Benefit (MB) – What pleasure or “utility” do you get out of the next level or item?
Incentive◦Why do we act?◦We do it when MB is greater than or