Suppose there was a debate regarding how to spend $1 billion in newly found revenues in the budget. Suppose the centrist Democrat suggests an increase to infrastructure spending. Suppose the centrist Republican suggests an increase in cyber-defense spending. The Democrat says that, on average, infrastructure spending does the most good, so more is better. The Republican is arguing that the extra cyber-security purchased by the extra spending will increase well-being the most. What is going on here?

A. Both are employing marginal analysis, just from different perspectives.
B. Only the Republican is using marginal analysis.
C. Neither are using marginal analysis.
D. Only the Democrat is using marginal analysis.


Answer: B

Economics

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