Econ 1.8

Marginal benefit refers to the additional benefit that your activity provides to you.

True

The additional cost to a producer of hiring an additional unit of labor is called the marginal cost.

True

When voluntary exchange takes place, both parties gain from the exchange.

True

Making "how much" decisions involves

determining the additional benefits and the additional costs of that activity.

In economics, the term ________ means "additional" or "extra."

marginal

The extra cost associated with undertaking an activity is called

marginal cost

A restaurant sells a large soft drink at a fixed price of $1.79. A term used by economists to describe the money received from the sale of an additional large soft drink is

marginal revenue

The highest valued alternative that must be given up to engage in an activity is the definition of

opportunity cost.

The ________ the sale of an additional unit of a product is a marginal benefit to the firm.

revenue received from

Making optimal decisions "at the margin" requires

weighing the costs and benefits of a decision before deciding if it should be pursued.