Final answer:
Cost-benefit analysis involves maximizing benefits and minimizing costs, using marginal analysis to compare changes in costs and benefits for decision-making. A T-shaped chart is typically used to visually weigh costs against benefits in this process.
Step-by-step explanation:
Cost-benefit analysis is a process that involves maximizing benefits and minimizing costs. This includes weighing marginal costs, which represent the extra cost of adding a unit, against marginal benefits, which are the extra benefit of adding the same unit. A T-shaped chart is one of the primary tools used in a Cost Benefit Analysis, where costs are listed on one side and benefits on the other. These costs refer to what you give up (money, effort, time) and benefits refer to what is gained (money, time, experience) from a decision. In practical applications, cost-benefit analysis is evident in scenarios like Election Day where voters conduct an individual cost-benefit analysis to make decisions such as whether or not to support funding a new community pool, considering differing personal stakes. Marginal analysis, or change analysis, is a key concept in economics used to make decisions by comparing the changes in costs and benefits from one option to another, rather than looking at the total costs and benefits.