The Power of Marginalism
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Questions and Answers

According to marginalism, why is the price of diamonds higher than that of water?

  • Because diamonds have greater marginal physical productivity than water
  • Because diamonds have greater total utility than water
  • Because diamonds have greater marginal utility than water (correct)
  • Because diamonds have greater marginal rates of substitution than water

    • What is the central concept of marginalism?

  • Marginal rates of substitution
  • Marginal physical productivity
  • Marginal utility (correct)
  • Total utility

    • What role did marginal physical productivity play in the explanation of cost according to marginalists?

  • Complementary role
  • Primary role
  • No role
  • Secondary role (correct)

    • Which tradition emerged from British marginalism and gave marginal rates of substitution a more fundamental role in analysis?

    <p>Neoclassical tradition</p> Signup and view all the answers

    Is marginalism an integral part of mainstream economic theory?

    <p>Yes</p> Signup and view all the answers

    Which field of study focuses on the production, distribution, and consumption of goods and services?

    <p>Economics</p> Signup and view all the answers

    What does microeconomics analyze?

    <p>The behavior of individual agents and markets</p> Signup and view all the answers

    What does macroeconomics analyze?

    <p>The behavior of economic agents</p> Signup and view all the answers

    What is the distinction between positive economics and normative economics?

    <p>Positive economics describes 'what is', while normative economics advocates 'what ought to be'</p> Signup and view all the answers

    What is the distinction between economic theory and applied economics?

    <p>Economic theory focuses on theoretical concepts, while applied economics focuses on practical applications</p> Signup and view all the answers

    Which social science studies the production, distribution, and consumption of goods and services?

    <p>Economics</p> Signup and view all the answers

    What does microeconomics analyze?

    <p>The behavior of economic agents</p> Signup and view all the answers

    What does macroeconomics analyze?

    <p>The economy as a system</p> Signup and view all the answers

    What is the distinction between positive economics and normative economics?

    <p>Positive economics describes 'what is', while normative economics describes 'what ought to be'</p> Signup and view all the answers

    What are the broad distinctions within economics?

    <p>All of the above</p> Signup and view all the answers

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