If a Decision Maker Uses Marginal Analysis, Then the Relevant

question 132

Multiple Choice

If a decision maker uses marginal analysis, then the relevant costs are the

• A) full costs of a particular activity or product.
• B) fixed costs which do not vary with the extra activity or output.
• C) profits obtained on the activity or product.
• D) average costs for a particular activity or product.
• E) additional costs of a particular activity or product.

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Definitions:

Gross Earnings

The total amount of money earned by an individual or company before any deductions or taxes are applied.

Medicare Withholding

The portion of an employee's paycheck that is deducted to contribute to the Medicare program, which provides health insurance to individuals who are over 65 or meet other specific criteria.

Social Security Withholding

The portion of an employee's wage that is deducted and sent to the government to fund Social Security benefits.

Federal Income Tax Withholding

The process by which an employer deducts a portion of an employee's income and pays it directly to the government, as a prepayment of the employee's federal income tax.