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Essay text:
"Marginal analysis refers to the comparison of marginal benefits and marginal costs"
(McConnell & Brue, 2004, pg. 4)
When individuals act to satisfy their wants, they behave rationally. Rational behavior is
consistent behavior that maximizes an individual's satisfaction. The notion of rational
behavior rests on three assumptions:
???First the individual has a preference and can identify, within limits, what he or
she wants.
???Second, the individual is capable of ordering his or her wants consistently,
from most preferred to least preferred.
???Third, the individual will choose consistently from these ordered preferences
to maximize his or her satisfaction...
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