Give reasons or explain the following statements. 5) Marginalism principle is used as a tool of analysis in micro economics.

Give reasons or explain the following statements.

5) Marginalism principle is used as a tool of analysis in micro economics.

ANSWER:

Marginalism principle focuses on studying the change in total amount when one additional unit is added to it. This additional unit is called the marginal unit. All microeconomic decisions are based on this concept.

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