Answer:
a. They are evaluated in terms of relative scarcity.
b. marginal cost-benefit analysis
Step-by-step explanation:
1. a. They are evaluated in terms of relative scarcity.
The factors of production, which are the resources used to produce goods and services, are evaluated in terms of their relative scarcity, meaning how easily they can be obtained or replaced in comparison to other factors. This determines their price and the cost of using them to produce a product.
The factors of production are typically categorized into land, labor, capital, and entrepreneurship, which are all subject to the law of diminishing marginal benefit, meaning the additional benefit of an extra unit of a factor decreases as the amount of that factor used increases. Most factors of production are scarce and subject to market forces, although there are also non-rival factors, which can be used by multiple people or organizations at the same time without reducing their availability for others. The factors of production are acquired in the factor market, not the product market.
2. The correct answer is b. marginal cost-benefit analysis. Deciding whether to purchase an additional unit of a good involves weighing the marginal benefits against the marginal costs. This is known as marginal cost-benefit analysis. It is a rational decision-making process, not non-rational decision-making (a). Total cost-benefit analysis (c) involves considering the total benefits and total costs of a decision, while finding the least utility per dollar for consumers (e) is a concept related to consumer behavior and utility maximization. Opportunity costs (d) are the benefits forgone when choosing one alternative over another and are a key part of marginal cost-benefit analysis