Question

Juan realizes that if he studies an extra hour for his test, he will score five points higher. For each extra hour spent studying, he is getting one hour less sleep. When deciding whether to spend an additional hour studying or sleeping, Juan is engaged in what economic activity? A) bartering B) marginal analysis C) market transactions D) trade negotiations

Answer 1

Answer:

When deciding whether to spend an additional hour studying or sleeping, Juan is engaged in Marginal Analysis.

Explanation:

Marginal analysis is a technique of examining costs and benefits of a decision taken which is precisely what Juan is doing. Here, five additional points are the benefit and losing one hour of sleep is the required cost of that benefit.

Corporations around the world use marginal analysis as a tool to assist them in profit maximization.