Marginal analysis is a method used in economics to assess the benefits and costs of small changes in decision-making. Among the options provided, option A: ‘You pay to repair your used car because of all the money you have spent on recent repairs’ reflects a common misunderstanding known as the sunk cost fallacy. This is when past expenditures influence current decisions, rather than the future benefits vs. costs.
On the other hand, B: ‘Overeating’ can be better aligned with marginal analysis. When deciding whether to eat another slice of cake, you consider the additional satisfaction (utility) gained from it versus the discomfort (cost) that may come with overeating. The choice made here is based on comparing the marginal benefit (happiness from eating more) to the marginal cost (feeling unwell afterwards).
In conclusion, while both options involve decision-making, option B serves as a clearer example of marginal analysis since it involves evaluating the consequences of a small change in behavior, rather than relying on past costs.