Question

Multi-selection: Check all that apply.

Which of the following exemplify "marginal reasoning?"

You must choose all that apply.

Question 27 options:

A)

Arnold, a man of 35 years of age, is a creature of habit. His new girl friend wants him to consider buying a new style of shirt. However, he has been wearing the same style since he was 16 years old, and he refuses to change. He will not consider the marginal benefit of the new style. Nor will he compare it to the marginal cost. Instead, he buys the same old style...and is surprised when his girl friend leaves him.

B)	Anya was dating a man named Arnold, but she realized that he was immature and was unwilling to change. She carefully weighed the benefits of continuing to see him and found that they did not justify the costs, so she decided to leave him.

C)

Keshawn earned a promotion and decided to buy a new car. He found one that he really liked. Then he sat down and made a list of all the things he liked about the car and what they were worth to him. Next, after talking with the car dealer, he came up with an estimate of how his costs would change. He decided to buy the car, given that the value of the benefits justified the costs.

D)

Eddie is impulsive fellow and is easily pushed into things. At a garage sale, someone talked him into buying an electric toy dune buggy for children. Looking back on his decision, Eddie is unsure why he bought the dune buggy, because he doesn't have any children. It seemed like a "good deal," but he didn't consider how it would possibly benefit him.

Answer 1

Ans. Option b and c
Marginal reasoning is when marginal benefits i.e. benefits from an additional unit are compared with marginal cost i.e. cost incurred due to an additional unit.
In part b, Anya compared benefits of continuing with Arnold against the costs before making the decision to stop seeing him. Thus, this is an example of marginal reasoning.

In part c, Keshawn compared the cost and benefits of the features of the car before making the decision to buy the car. So, this is in example of marginal reasoning.

But in part a and d, cost and benefits are not considered before buying the good, so, these are not marginal reasoning's examples.