Suppose there was a debate regarding how to spend $1 billion in newly found revenues in the budget. Suppose the most liberal Democrat suggests an increase to Food Stamp (SNAP) allotments. Suppose the most conservative Republican suggests an increase in defense spending. The Republican says that, on average, military spending does the most good, so more is better. The Democrat is arguing that the extra food purchased by the extra spending will increase well-being the most. What is going on here?

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


Answer: A

Economics

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