Question

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

Select the correct answer below:

total benefits, total costs

total benefits, marginal costs

marginal benefits, total costs

marginal benefits, marginal costs

2.)How does a decrease in demand for financial capital affect interest rates?

Select the correct answer below:

Interest rates will increase.

Interest rates will decrease.

Interest rates will remain the same.

3.)Which of the following best defines an economic theory?

Select the correct answer below:

a simplified representation of how two or more variables interact with each other

a technique of thinking that helps its possessor to draw correct conclusions

an assumption about human behavior

a graph that represents the answer to a problem that has already been figured out

Answer 1

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

Select the correct answer below:

total benefits, total costs

total benefits, marginal costs

marginal benefits, total costs

marginal benefits, marginal costs

Correct answer :

marginal benefits, marginal costs

Marginal analysis is analysis of costs and benefits from last unit produced or consumed.

2. )How does a decrease in demand for financial capital affect interest rates?

Select the correct answer below:

Interest rates will increase.

Interest rates will decrease.

Interest rates will remain the same.

Correct answer :

Interest rates will decrease.

Decrease in demand for capital will lead to reduction in demand for money and interest rates will fall.

3.)Which of the following best defines an economic theory?

Select the correct answer below:

a simplified representation of how two or more variables interact with each other

a technique of thinking that helps its possessor to draw correct conclusions

an assumption about human behavior

a graph that represents the answer to a problem that has already been figured out

Correct option is : a technique of thinking that helps its possessor to draw correct conclusions