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LESSON 3 MARGINALISM 3-1 HIGH SCHOOL ECONOMICS 3 RD EDITION © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY How do you know when one more is too much?
LESSON 3 MARGINALISM 3-2 HIGH SCHOOL ECONOMICS 3 RD EDITION © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY Marginal utility is the extra value or additional satisfaction a consumer obtains from consuming one additional unit of output.
LESSON 3 MARGINALISM 3-3 HIGH SCHOOL ECONOMICS 3 RD EDITION © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY Diminishing marginal utility is when the additional satisfaction or marginal utility associated with consuming additional units of the same product in a given amount of time eventually declines.
LESSON 3 MARGINALISM 3-4 HIGH SCHOOL ECONOMICS 3 RD EDITION © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY Marginal analysis is a decision-making tool for comparing the additional or marginal benefits of a course of action to the additional or marginal costs.
LESSON 3 MARGINALISM 3-5 HIGH SCHOOL ECONOMICS 3 RD EDITION © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY Glove Production Table Number of Workers (1) Number of Gloves Produced (2) (3)(4)(5)
LESSON 3 MARGINALISM 3-6 HIGH SCHOOL ECONOMICS 3 RD EDITION © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY Marginal product is the additional output produced by each successive unit of an input.
LESSON 3 MARGINALISM 3-7 HIGH SCHOOL ECONOMICS 3 RD EDITION © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY The law of diminishing returns states that as more units of a variable input are added to one or more fixed inputs, eventually the number of additional units of output produced will begin to fall.
LESSON 3 MARGINALISM 3-8 HIGH SCHOOL ECONOMICS 3 RD EDITION © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY Marginal cost is the increase in a producer’s total cost when it increases its output by one unit.
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© 2002 Prentice Hall Business PublishingPrinciples of Economics, 6/eKarl Case, Ray Fair 9 Prepared by: Fernando Quijano and Yvonn Quijano Input Demand:
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Citizens must make them every day. Choices occur because resources are limited Needs are required, such as food and shelter Wants make life more.
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© 2002 Prentice Hall Business PublishingPrinciples of Economics, 6/eKarl Case, Ray Fair 6 Prepared by: Fernando Quijano and Yvonn Quijano The Production.
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