In What Way May Marginal Analysis Be Useful in Helping

question 13

Multiple Choice

In what way may marginal analysis be useful in helping to make economic choices?  

• A) It eliminates impractical or irrelevant information. 
• B) It eliminates incorrect decisions and bad choices. 
• C) It involves comparing the additional costs and additional benefits of an activity prior to making a decision. 
• D) It involves examining only the total costs and total benefits of an activity prior to making a decision.

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Definitions:

Conservatism

An accounting principle that advises caution, directing accountants to choose methods and estimates that are least likely to overstate assets and income.

Fair Value Accounting

An accounting approach that measures and reports assets and liabilities at their estimated market prices.

Financial Crises

A situation where the value of financial institutions or assets drops significantly, often characterized by panicked selling and loss of confidence in the financial system.

Accounting Standards Codification

The collection and integration of the authoritative accounting standards for U.S. GAAP.