1. What does the word "marginal" mean?

2. What does the phrase "marginal analysis" mean?

3. What does marginal revenue mean?

4. What does marginal cost mean?

5. What does marginal profit mean? How are marginal revenue and marginal cost related to marginal profit?

6. Recall that profit is like a hill; it goes up and then it goes down. Our goal as a firm is to choose the value of Q that gets us to the top of the hill.

1. A firm tells you that the marginal revenue for the 200^th unit of output = 12 and the marginal cost for that unit = 8. What does that mean?
2. Is profit rising or falling or not changing?
3. What advice should you give this firm? (Produce more; produce less; don't change your production number because it is just right). Explain your advice.
4. How did marginal analysis help you to give this firm advice? Answer the question "Is it worth it?" in your answer.