Scarcity, opportunity cost, and marginal analysis Ana is training for a triathlon, a timed race that combines swimming, biking, and running. Because her pool sessions are helping her swim more quickly, Ana plans to reduce by 1 hour per week the time she spends training on the bike and increase by 1 hour the time she spends in the swimming pool; however, her husband says that she should stop doing any biking and running and spend all 20 hours per week in the pool. Which basic principle of individual choice does this scenario illustrate?

a. Many decisions are made on the margin.
b. Resources are scarce.
c. People usually exploit opportunities to make themselves better off.
d. All costs are opportunity costs.

Marginal Analysis is a process of comparing a one unit incremental cost increase of activity with a corresponding increase in benefits. In business, managers use marginal analysis, to determine the level at which they should stop incurring more cost to generate the most revenue. It is one of many tools used to maximize profits.