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Managerial Economics Managerial Economics – Study Guide: Chapters 1-7CHAPTER 1:Cost-Benefit PrincipleAn economic agent should undertake an action if and only if the marginal benefit is greater than the marginal costIgnore sunk costsConsider your next best optionsOpportunity Cost (Marginal Thinking)Compare Marginal Benefit to Marginal CostEx: MBA Program – BenefitsLearningEntertainingChecking out the professorPaid tuition (SUNK COST)Allocation DecisionsIllustrate.