Definition of optimization and to distinguish between the total value and marginal analysis optimization.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 3, Problem 1Q

To determine

Definition of optimization and to distinguish between the total value and marginal analysis optimization.

Expert Solution & Answer

Explanation of Solution

Optimization is one of the major principles, upon which economics is based. It refers to the process of an economic agent choosing the most satisfying option under the given feasibility constraints.

Total value optimization helps us to pick the best alternative by calculating the total benefit derived from various options. It can be in terms of benefit, cost or net benefit. Whichever alternative yields the highest (lowest) total benefit (cost) or net total benefit becomes the chosen alternative in this case.

Marginal analysis, on the other hand, concentrates on evaluating how the value of the alternatives change with an increase in a single unit. This can be done by observing the change in net benefit, costs or benefit as the magnitude increases by a single unit. Marginal refers to the change that occurs due to the addition of one unit. If the marginal costs of an alternative exceed its marginal benefit, that alternative is not considered feasible.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Explain how the introduction of egg replacers and plant-based egg products will impact the bakery industry. Provide a graphical representation.

Explain Professor Frederick's "cognitive reflection" test.

11:44 Fri Apr 4 Would+You+Take+the+Bird+in+the+Hand Would You Take the Bird in the Hand, or a 75% Chance at the Two in the Bush? BY VIRGINIA POSTREL WOULD you rather have $1,000 for sure or a 90 percent chance of $5,000? A guaranteed $1,000 or a 75 percent chance of $4,000? In economic theory, questions like these have no right or wrong answers. Even if a gamble is mathematically more valuable a 75 percent chance of $4,000 has an expected value of $3,000, for instance someone may still prefer a sure thing. People have different tastes for risk, just as they have different tastes for ice cream or paint colors. The same is true for waiting: Would you rather have $400 now or $100 every year for 10 years? How about $3,400 this month or $3,800 next month? Different people will answer differently. Economists generally accept those differences without further explanation, while decision researchers tend to focus on average behavior. In decision research, individual differences "are regarded…

Answer 2

Question

Chapter 3, Problem 1Q

To determine

Definition of optimization and to distinguish between the total value and marginal analysis optimization.

Expert Solution & Answer

Explanation of Solution

Optimization is one of the major principles, upon which economics is based. It refers to the process of an economic agent choosing the most satisfying option under the given feasibility constraints.

Total value optimization helps us to pick the best alternative by calculating the total benefit derived from various options. It can be in terms of benefit, cost or net benefit. Whichever alternative yields the highest (lowest) total benefit (cost) or net total benefit becomes the chosen alternative in this case.

Marginal analysis, on the other hand, concentrates on evaluating how the value of the alternatives change with an increase in a single unit. This can be done by observing the change in net benefit, costs or benefit as the magnitude increases by a single unit. Marginal refers to the change that occurs due to the addition of one unit. If the marginal costs of an alternative exceed its marginal benefit, that alternative is not considered feasible.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 3, Problem 1Q

To determine

Definition of optimization and to distinguish between the total value and marginal analysis optimization.

Expert Solution & Answer

Explanation of Solution

Optimization is one of the major principles, upon which economics is based. It refers to the process of an economic agent choosing the most satisfying option under the given feasibility constraints.

Total value optimization helps us to pick the best alternative by calculating the total benefit derived from various options. It can be in terms of benefit, cost or net benefit. Whichever alternative yields the highest (lowest) total benefit (cost) or net total benefit becomes the chosen alternative in this case.

Marginal analysis, on the other hand, concentrates on evaluating how the value of the alternatives change with an increase in a single unit. This can be done by observing the change in net benefit, costs or benefit as the magnitude increases by a single unit. Marginal refers to the change that occurs due to the addition of one unit. If the marginal costs of an alternative exceed its marginal benefit, that alternative is not considered feasible.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 3, Problem 1Q

To determine

Definition of optimization and to distinguish between the total value and marginal analysis optimization.

Expert Solution & Answer

Explanation of Solution

Optimization is one of the major principles, upon which economics is based. It refers to the process of an economic agent choosing the most satisfying option under the given feasibility constraints.

Total value optimization helps us to pick the best alternative by calculating the total benefit derived from various options. It can be in terms of benefit, cost or net benefit. Whichever alternative yields the highest (lowest) total benefit (cost) or net total benefit becomes the chosen alternative in this case.

Marginal analysis, on the other hand, concentrates on evaluating how the value of the alternatives change with an increase in a single unit. This can be done by observing the change in net benefit, costs or benefit as the magnitude increases by a single unit. Marginal refers to the change that occurs due to the addition of one unit. If the marginal costs of an alternative exceed its marginal benefit, that alternative is not considered feasible.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 3, Problem 1Q

To determine

Definition of optimization and to distinguish between the total value and marginal analysis optimization.

Expert Solution & Answer

Explanation of Solution

Optimization is one of the major principles, upon which economics is based. It refers to the process of an economic agent choosing the most satisfying option under the given feasibility constraints.

Total value optimization helps us to pick the best alternative by calculating the total benefit derived from various options. It can be in terms of benefit, cost or net benefit. Whichever alternative yields the highest (lowest) total benefit (cost) or net total benefit becomes the chosen alternative in this case.

Marginal analysis, on the other hand, concentrates on evaluating how the value of the alternatives change with an increase in a single unit. This can be done by observing the change in net benefit, costs or benefit as the magnitude increases by a single unit. Marginal refers to the change that occurs due to the addition of one unit. If the marginal costs of an alternative exceed its marginal benefit, that alternative is not considered feasible.

Answer 6

Chapter 3, Problem 1Q

To determine

Definition of optimization and to distinguish between the total value and marginal analysis optimization.

Expert Solution & Answer

Explanation of Solution

Optimization is one of the major principles, upon which economics is based. It refers to the process of an economic agent choosing the most satisfying option under the given feasibility constraints.

Total value optimization helps us to pick the best alternative by calculating the total benefit derived from various options. It can be in terms of benefit, cost or net benefit. Whichever alternative yields the highest (lowest) total benefit (cost) or net total benefit becomes the chosen alternative in this case.

Marginal analysis, on the other hand, concentrates on evaluating how the value of the alternatives change with an increase in a single unit. This can be done by observing the change in net benefit, costs or benefit as the magnitude increases by a single unit. Marginal refers to the change that occurs due to the addition of one unit. If the marginal costs of an alternative exceed its marginal benefit, that alternative is not considered feasible.

Answer 7

Chapter 3, Problem 1Q

To determine

Definition of optimization and to distinguish between the total value and marginal analysis optimization.

Answer 8

Expert Solution & Answer

Explanation of Solution

Optimization is one of the major principles, upon which economics is based. It refers to the process of an economic agent choosing the most satisfying option under the given feasibility constraints.

Total value optimization helps us to pick the best alternative by calculating the total benefit derived from various options. It can be in terms of benefit, cost or net benefit. Whichever alternative yields the highest (lowest) total benefit (cost) or net total benefit becomes the chosen alternative in this case.

Marginal analysis, on the other hand, concentrates on evaluating how the value of the alternatives change with an increase in a single unit. This can be done by observing the change in net benefit, costs or benefit as the magnitude increases by a single unit. Marginal refers to the change that occurs due to the addition of one unit. If the marginal costs of an alternative exceed its marginal benefit, that alternative is not considered feasible.