Text 1: Economist Dr. Lisa Wong applies marginal analysis. "Additional units should be produced until marginal cost equals marginal revenue," Wong explains. "Rational firms optimize at the margin."
Text 2: Economist Dr. Robert Park examines behavioral factors. "Managers often lack information for marginal calculations," Park notes. "Firms use rules of thumb—markup pricing, historical patterns. Marginalist models describe idealized equilibria, not actual decision processes."
How does Park's observation relate to Wong's marginalist framework?
It shows marginalism is mathematically incorrect
It distinguishes between normative models and descriptive behavioral realities
It argues costs and revenues don't exist
It proves firms never optimize
Correct Answer: B
Choice B is the correct answer. Wong's marginalism describes optimal behavior. Park notes firms don't actually use marginal calculations—they use heuristics. Model prescribes; reality differs.
- Evidence: Park: models describe "idealized equilibria, not actual decision processes."
- Reasoning: Normative optimum vs. descriptive practice distinction.
- Conclusion: Park distinguishes what firms should do from what they actually do.
Choice A is incorrect because Park doesn't question math. Choice C is incorrect because Park discusses costs. Choice D is incorrect because Park discusses approximation, not optimization failure.