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What does the term "marginal" mean in economics?

A) The edge of a market
B) An additional or extra
C) Illegal
D) Secondary

1 Answer

7 votes

Final answer:

In economics, 'marginal' means the additional or extra impact of an economic decision, like producing one more unit of a good or hiring another worker.

Step-by-step explanation:

The term marginal in economics refers to the additional or extra effects of a decision or action. For instance, the marginal product is the additional output a firm can produce by adding one more worker to the production process. Economists use marginal analysis to evaluate the benefits or costs associated with a little more or a little less of something. This includes concepts such as the law of diminishing marginal utility, which indicates that as a person receives more of a good or resource, the added satisfaction from each additional unit tends to decrease. Marginal analysis is crucial in informing choices that are not all-or-nothing but rather involve incremental changes, such as hiring an extra hour of labor or producing one more unit of a good.

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