Question

Economists reason that the optimal decision is to continue any activity up to the point where the.

Answer 1

Economics studies consumer behavior in markets. A market is a gathering of consumers and providers of a good or service, as well as the structure or arrangement through which they engage in commerce. Three key presumptions about how people interact in marketplaces are made by economists. First, people are logical beings. It follows that both buyers and sellers employ all available information to further their objectives. Second, economic incentives influence how people behave.

Third, the best choices are made on the edge. The additional advantages and costs of a decision are referred to as the marginal benefit and marginal cost. According to economists, continuing any activity until the marginal benefit (or MB) equals the marginal cost is the best or optimal decision (MC). We can write MB = MC in symbols.

Government intervention in the economy in the United States and other market economies increased dramatically as a result of the Great Depression's high unemployment and corporate bankruptcy rates. Some government initiatives aim to increase the incomes of the underprivileged, the sickly, and the elderly. Government action has increased in recent years to support social objectives like environmental protection and the advancement of civil rights. Most economists contend that the United States and other countries have mixed economies rather than market economies because of the growing involvement of government in market economies.

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