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What are the different ways that economists use the word "marginal?"
What are the different ways that economists use the word "marginal?"
Expert Solution
In the economic context, "marginal" is synonym with "additional." Here are some common uses of the word:
- Marginal costs: additional costs of an action taken by an individual, company or government.
- Marginal benefits: additional benefits of an action taken by an individual, company or government.
- Marginal social costs: additional costs incurred by society for an action taken by an individual, company or government (often used in the context of externalities).
- Marginal social benefits: additional benefits of an action taken by an individual, company or government to society (often used in the context of externalities).
- Marginal utility: additional utility gained from a consumer's additional consumption.
- Marginal opportunity cost: the change in opportunity cost after a change in the production level.
- Marginal propensity to consume: a macroeconomic concept that measures the amount of additional consumption relative to additional income.
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