Question

# 1.Marginal analysis compares ____________ and ____________ to determine the optimal outcome or

choice.

total benefits, total costs

total benefits, marginal costs

marginal benefits, total costs

2.In marginal analysis, if possible, the optimal outcome is found when ______.

TB TC

MC MB

MB = MC

TB=TC

3.When considering the characteristics of the budget constraint, which of the following statements is true?

It is a legal limit on how much individuals may spend without going into bankruptcy.

The budget constraint slopes upward.

The budget constraint is a straight line.

The budget constraint is only for countries, not individuals.

4.If a family spends its entire budget in a given time frame, the family can afford either 10

restaurant meals or 30

home meals. Assuming the family spends its entire budget on just these two goods, what is the opportunity cost of one extra restaurant meal in the time frame? (Round your answer to two decimal places.)

5.Define opportunity cost.