quiz 2.2

Your employer has asked you to start working overtime and has offered to pay $18 per hour for every hour you work beyond forty hours a week. The wage rate for each of the first forty hours will continue to be the usual $15 per hour. In terms of dollars, what is the marginal benefit of working each hour of overtime?

$18

The revenue received from the sale of ________ of a product is a marginal benefit to the firm.

an additional unit

Making "how much" decisions involves

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

If the marginal benefit of the next slice of pizza exceeds the marginal cost, you will

eat the slice of pizza.

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

marginal

The extra cost associated with undertaking an activity is called

marginal cost

Suppose the U.S. government encouraged consumers to trade in their old automobiles for more efficient, new models by paying up to $5,000 for the old automobiles. These consumers who did trade in their old automobiles to take advantage of the government offer would be exemplifying the economic idea that

people respond to economic incentives.

When referring to "marginal" changes, the economic focus is on

small or incremental changes.

In terms of dollars, the marginal benefit of working five days a week instead of four days a week is

the wages received for the fifth day of work.

Making optimal decisions "at the margin" requires

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