Which of the Following Is an Example of Marginal Analysis

question 73

Multiple Choice

Which of the following is an example of marginal analysis?

• A) To determine the optimal number of workers, a firm calculates the net benefits of hiring an extra worker.
• B) To determine the optimal amount of fertilizer to be used, a farmer calculates the total benefits of using a given amount of fertilizer.
• C) To choose the optimal apartment to rent, an individual estimates the net benefits of renting an apartment close to his place of work.
• D) To determine the optimal output that a firm should sell, the manager calculates the total revenue earned by selling different levels of output.

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a long-term asset from the time of its purchase to the reporting date.

Accumulated Depreciation

Accumulated depreciation represents the total amount of depreciation expense that has been recorded for an asset since its acquisition.

Recognized Gain

The amount of profit that is reported for accounting or tax purposes, realized upon the sale or exchange of an asset.

Financing Charges

Costs associated with borrowing money, including interest, fees, and other charges.