Marginal Analysis ______

question 118

Multiple Choice

Marginal analysis ______.

• A)compares the marginal benefit and marginal cost of an action
• B)maximizes the difference between marginal revenue and total cost
• C)compares the total benefit and total cost of an action
• D)maximizes the difference between marginal revenue and marginal cost

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Definitions:

Price Ceiling

A regulation that sets the maximum allowable price for a particular good or service, intended to prevent sellers from charging high prices during demand spikes.

Government Intervention

Actions taken by government to affect the economy, markets or societal issues, which can include regulations, subsidies, and taxes.

Positive Externalities

These are benefits that a transaction or activity provides to those not involved in the transaction or activity.

Negative Externalities

Costs suffered by a third party as a result of an economic transaction that they were not directly involved in.