Question

When you are thinking on the margin, the factor that should most influence your decision is most closely described by which of the following terms _________
a. marginal cost
b. opportunity cost
c. the guns or butter theory
d. marginal opportunity benefits?

Answer 1

Answer:

B) opportunity cost

Explanation:

Opportunity cost refers to the cost of choosing one alternative over another, for example, if I decide to quit my job and start a band, my opportunity cost would be my old salary.

Thinking on the margin refers to a concept where decisions are based on small changes in resources, for example, if the price of gasoline increases by 30%, you will probably drive less.