Multiple Choice
Refer to the table below. The total cost of producing 199 pizzas is \$1,000, and the total cost of producing 200 pizzas is \$1,008. What is the marginal cost of producing the 200th pizza?
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0. Basic Principles of Economics
Marginal Analysis
Struggling with Microeconomics?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
One method for studying opportunity cost is to think in terms of:
A
marginal benefits and marginal costs
B
market equilibrium price and quantity
C
average fixed cost and average variable cost
D
total revenue and total cost
Verified step by step guidance1
Understand that opportunity cost refers to the value of the next best alternative foregone when making a decision.
Recognize that marginal benefits represent the additional benefit received from consuming or producing one more unit of a good or service.
Recognize that marginal costs represent the additional cost incurred from consuming or producing one more unit of a good or service.
Realize that comparing marginal benefits and marginal costs helps in determining the optimal choice, as it shows whether the benefit of an action outweighs its cost.
Conclude that studying opportunity cost effectively involves analyzing marginal benefits and marginal costs rather than other pairs like market equilibrium, average costs, or total revenue and total cost.
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