AP Microeconomics Cba 2 B a Define Marginal Analysis and Related Terms B Explain a Decision Using Marginal Analysis Using a Table or a Graph When Questions

Practise calculating marginal benefits and costs, choosing the optimal activity level, allocating a scarce extra unit, and ignoring fixed costs that do not change the margin.

Exam points

calculate marginal benefit from changes in total benefit and marginal net benefit as MB minus MC
compare marginal benefit with marginal cost to increase, decrease or maintain an activity level
identify the optimal quantity at MB equals MC or at the last unit with non-negative marginal net benefit
allocate an extra unit of time to the activity with the greater marginal gain
explain why a fixed-cost change leaves the optimal quantity unchanged when marginal cost is unaffected

[Maximum number: 1]

Deskward is a typical profit-maximizing firm that produces and sells wooden desks in a constant-cost, perfectly competitive market that is in long-run equilibrium.

If the monthly rent, a fixed cost, on Deskward's factory building increases, what will happen to the firm's profit-maximizing quantity in the short run? Explain.

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AP Microeconomics Cba 2 B a Define Marginal Analysis and Related Terms B Explain a Decision Using Marginal Analysis Using a Table or a Graph When Questions question 1