Making Choices on the Margin Means

question 119

Multiple Choice

Making choices on the margin means

• A) scribbling on the edges of your notebook paper.
• B) comparing all relevant alternatives systematically and incrementally.
• C) making a decision based on emotions.
• D) making decisions in the largest possible increments.
• E) taking account of all marginal benefits, all opportunity costs, and all sunk costs.

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Definitions:

Forest Industry

The sector involved in the management, conservation, harvesting, processing, and sales of forests and forestry products.

Decline

A decrease in the value or price of an asset or a reduction in the strength or quality of something.

Strip Bond

A financial instrument representing a portion of a debt security without periodic interest payments, where the investor receives the face value at maturity.

Maturity

The time when a financial instrument, such as a bond or loan, reaches its due date and is to be paid off.