Marginal Analysis Might Take the Form of Such Questions As,"Should

question 26

Multiple Choice

Marginal analysis might take the form of such questions as,"Should we extend our hours to include Sundays?" or "What if we put more apples in the pie?" The basic principle is that

• A)as long as a marketing action breaks even,the action is worth taking.
• B)expected incremental revenues from pricing and other marketing actions must more than offset incremental costs.
• C)you "don't rock the boat" if your program is making a profit;"leave well enough alone."
• D)if you are not willing to take risks,even if the numbers tell you otherwise,your business will ultimately fail.
• E)marketing and finance are two different animals: "If it feels right in your gut…go for it."

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Definitions:

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Net Exports

The difference between a country's total value of exports and its total value of imports; a key component of a nation's GDP.

U.S. Bonds

Debt securities issued by the United States government as a way of borrowing money from investors.

Aggregate Demand

The aggregate demand within the economy, reflecting the total goods and services sought after at a specific price level during a particular time frame.