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Marginal Analysis. Marginal Analysis. IS ALL about making your final choice!. Economic Choice is really just a cost­-benefit model of how people make decisions. How much utility each decision would bring Determine the opportunity cost of each option

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Marginal analysis1
Marginal Analysis

IS ALL

about making your

final choice!



  • Concept is called people make decisions.Marginal Utility

  • Choices are not so much about whether to do something but instead how much.


  • Example people make decisions.:

  • Remember: The amount of utility that a given thing brings usually depends on how much of that given thing a person has already had.


  • This is demonstrating the people make decisions.law of diminishing marginal utility. Each additional, or marginal, piece of pizza brings less utility than the previous piece so that the marginal utility brought by each additional slice diminishes.




Marginal analysis2

Marginal Analysis each good will maximize each person’s total utility are different.


Marginal analysis3
Marginal Analysis each good will maximize each person’s total utility are different.

IS ALL about making your final choice!




  • Remember people make decisions.: The amount of utility that a given thing brings usually depends on how much of that given thing a person has already had.


  • This is demonstrating the people make decisions.law of diminishing marginal utility. Each additional, or marginal, piece of pizza brings less utility than the previous piece so that the marginal utility brought by each additional slice diminishes.




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