Suppose that Marie is buying bananas. She decides that she would like to purchase three bananas at the price of $0.25 per banana, but not a fourth banana. Which of the five foundations of economics best describes Marie’s thinking? Choose one:A. marginal thinkingB. trade creates valueC. opportunity costD. trade-offsE. incentives

Option (A) is correct.

Explanation:

Marginal thinking refers to the type of thinking that a consumer uses in order to decide whether to buy an additional units or not. In marginal analysis, a consumer compares the marginal benefit and marginal cost associated with that additional unit.

If the marginal benefit is greater than the marginal cost then the consumer decided to consume the additional unit and if the marginal benefit is lower than the marginal cost then as a result the consumer will not buy an additional unit.

In our case, Marie is not buying the fourth banana because the marginal cost of fourth banana is greater than the marginal benefit from fourth banana.