Economic Analysis Economic analysis is marginal analysis . In marginal analysis, one examines the consequences of adding to or subtracting from the current state of affairs. Consider, for example, an employer's decision to hire a new worker. The employer must determine the marginal benefit of hiring the additional worker as well as the marginal cost . The marginal benefit of hiring the worker is the value of the additional goods or services that the new worker could produce. The marginal cost is the additional wages the employer will have to pay the new worker. An economic analysis of the decision to hire the new worker involves weighing the marginal benefits against the marginal costs. If the marginal benefits are greater than the marginal costs, then it makes sense for the employer to hire the worker. If not, then the new worker should not be hired.
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