Question

Suppose that Marie is buying bananas. She decides that she would like to purchase three bananas at the price of $0.25 per banana, but not a fourth banana. Which of the five foundations of economics, illustrated above, best describes Marie’s thinking?A. opportunity cost B. trade-offs C. marginal thinking D. trade creates value E. incentives

Answer 1

Answer:

The correct answer is letter "C": marginal thinking.

Explanation:

Marginal Cost of Production is an economic term that refers to the change in production costs resulting in producing one more unit. It is most often used within manufacturers as a means of identifying an optimum production level. The formula to calculate the cost of production is the change in total production cost divided by the change in total quantity produced.

As Marie is analyzing the extra benefit and cost of buying one more banana,  economists would say she is performing "marginal thinking".