Which economic principle pertains to how a change in a property affects its value as a whole?

• A. Marginal analysis
• B. Market equilibrium
• C. Comparative advantage
• D. Law of demand

Answer: (A)

Verified step by step guidance

1. Understand the concept of 'marginal analysis': it examines how a small change in one variable affects the overall outcome or value. In economics, this often means looking at the additional benefit or cost from a one-unit change in an activity or property.
2. Recognize that 'market equilibrium' refers to the point where supply equals demand, not specifically how a change in a property affects its total value.
3. Know that 'comparative advantage' relates to the ability of an entity to produce a good or service at a lower opportunity cost than others, which is about efficiency in production rather than changes in value due to property changes.
4. Recall that the 'law of demand' describes the inverse relationship between price and quantity demanded, which is about consumer behavior rather than marginal changes in value.
5. Conclude that the principle which directly deals with how a change in a property affects its overall value is 'marginal analysis', because it focuses on the incremental impact of changes.