Making Rational Decisions "At the Margin" Means That People

question 176

Multiple Choice

Making rational decisions "at the margin" means that people

• A) make those decisions that do not impose a marginal cost.
• B) evaluate how easily a decision can be reversed if problems arise.
• C) compare the marginal costs and marginal benefits of each decision.
• D) always calculate the marginal dollar costs for each decision.

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Definitions:

Expected Value

A statistical measure that calculates the average outcome of a random variable after many repetitions of an experiment.

Random Variable

A variable that can take numeric values, which are the results of a random event.

Mean

A measure of central tendency, calculated by adding all the values in a dataset and dividing by the number of values.

Continuous Probability Distributions

Mathematical functions that assign probabilities to every possible value of a continuous random variable.