Marginal analysis and decision-making: Concept: The Fundamental Assumption of Economics All social phenomena emerge from the actions and interactions of individuals who are choosing in response to expected marginal benefits and expected marginal costs to themselves. Definition: Marginal is additional or incremental (amount of increase) or decremental (amount of decrease). Should I do (choose) activity x? MC(x) = the additional costs of doing x MB(x) = the additional benefits of doing x Rule: If Expected MB(x) > Expected MC(x), do x; otherwise don't. Application: Would an employer ever hire anyone if the expected additional cost of his or her employment were greater than the expected marginal/additional benefit? Of course not, to do so would be irrational. Assumptions: In economics, we assume rationality. No one would intentionally harm themselves. Do businesses have the ability to measure costs? Marginal costs?

Assignment 1 - Ceteris Paribus 0 Answer the following questions: Provide your opinion and analysis and 'justify' your responses. 1. What is the concept of Ceteris Paribus? 2. In this age of instantaneous communication (due to the proliferation of Information and Communication Technologies) is this 'fundamental' law of economics in need of being reworked. If so, why? If not, why not? 3. Are there any industrial sectors where economic forecasting is still viable based on this assumption (the economic forecasts are valid assuming that all things remain the same) Or has our 'information society' made this fundamental assumption irrelevant? You will have to look beyond your textbook to find a definition of Ceteris Paribus. Your answer (no more than 1000 words) is sent to me via the 'Assignment' under the 'Activites' tab by midnight of the Sunday of Week 4. (See schedule) Attachments OK here.2. Palm restaurants are considered the gold standard for steak houses, with over 25 global locations, most in the U.S. The menu is the same at all locations, but prices may differ. For example, in 2011, the price of a 9-ounce filet in one of the New York locations was $43, whereas in San Antonio, it was $41. You are an analyst that has been tasked with providing the fundamental economics underlying Palm's business. Note that this is an example of 3rd degree price discrimination, since the customers are identified by certain characteristics, namely, whether they are eating in New York or San Antonio