Think at the margin: one more unit, its extra cost and extra benefit

Grade 12 Social Studies Worksheet

Circle the best answer.

1. Read this first

   Use this

   Cards A and B on a firm's output (all made up for practice). Card A, "A workshop's costs (made up)". Written for this sheet. Table, columns Units made in a day | Total cost: 0 | $20; 1 | $32; 2 | $41; 3 | $49; 4 | $62; 5 | $79; 6 | $101. The $20 is owed even if the workshop makes nothing. Card B, "Prices (made up)". Written for this sheet. Summary in our words, not a quotation: the workshop sells each unit at the market price, which it cannot change. The price is $20 at first, later $11, and later still $24.

2. 1.

   Zee uses cards A and B. How many units should the workshop make when the price is $20?

   • Six: the price of $20 is above the average cost of the first units, so more output pays
   • Five: the 5th unit adds $17 of cost and sells for $20, but the 6th would add $22
   • Two: the first units are the cheapest to make, so output should stop where costs are lowest
   • Four: average cost per unit is lowest at four units, $15.50, so that is the right output
3. 2.

   The price falls to $11. Pia uses cards A and B. What should the workshop do?

   • Make three: that loses $16, less than the $20 owed if it makes none
   • Make five: the price is above the cost of the first units, so output should rise to five
   • Close down: at $11 the workshop cannot cover its $20 cost, so it should make nothing
   • Make six: with a price this low, the workshop should make as many units as it can to spread the $20
4. 3.

   The price rises to $24. Luz uses cards A and B. How does output respond, and what does it show?

   • Output stays at five, since the cost of making units does not change when the price changes
   • Output falls, since a higher price means fewer buyers and the workshop makes fewer units
   • Output rises by one to six units: a higher price makes costlier units worth making
   • Output rises by two or more units, since a higher price makes each costlier unit pay

5. Use this

   Cards A and B on income tax and overtime (card A is IRS data; card B is made up). Card A, "Federal income tax brackets for 2024, single filers". Source: Internal Revenue Service, IRS provides tax inflation adjustments for tax year 2024 (irs.gov), read Nov 14, 2026. Summary in our words, not a quotation: the rate is 10 percent on taxable income up to $11,600; 12 percent on the part over $11,600 up to $47,150; 22 percent on the part over $47,150 up to $100,525; and 24 percent on the part over $100,525. Each rate applies only to the part of income inside its bracket. Card B, "Ola's overtime (made up)". Written for this sheet. Summary in our words, not a quotation: Ola is single and has $46,010 of taxable income. Ola is offered overtime at $30 an hour, up to $3,000 in all (100 hours). Ola values an hour of free time at $24.

6. 4.

   Jun works out how many overtime hours are worth taking for Ola, using cards A and B. What is the best number?

   • None: Ola's marginal rate is 22 percent, and a $30 hour then keeps $23.40, below Ola's $24
   • About 38 hours: those hours keep $26.40 each, but hours beyond keep only $23.40, below Ola's $24
   • All 100: the whole $3,000 leaves $2,454, or $24.54 an hour, which is above Ola's $24
   • Cannot be decided: Ola's value of free time is a feeling, so no number of overtime hours can be worked out

7. Use this

   Cards A to C on trade between two countries (all made up for practice). Card A, "Output in one worker-day (made up)". Written for this sheet. Table, columns | Grain (tons) | Cloth (bolts), each worker-day makes one or the other: Country M | 12 | 6; Country N | 3 | 3. Card B, "A proposal (made up)". Written for this sheet. Summary in our words, not a quotation: M offers N 1.5 tons of grain for each bolt of cloth. A third speaker says M should make its own cloth, since M is better at both goods. Card C, "A second proposal (made up)". Written for this sheet. Summary in our words, not a quotation: N offers M 2.5 tons of grain for each bolt of cloth.

8. 5.

   Milo reads card A. Which country has the comparative advantage in cloth, and why?

   • Country M: it makes 6 bolts a worker-day to N's 3, so M gives up less to make cloth
   • Country M: a bolt costs it 6 workers' days against N's 3, so cloth costs M less
   • Country N: a bolt of cloth costs N 1 ton of grain but costs M 2 tons
   • Neither: M is better at both goods, so N has no advantage in either of them
9. 6.

   Bo compares the two proposals on cards B and C. Which statement is best supported?

   • M's offer of 1.5 tons gains both, but N's offer of 2.5 tons would cost M more than it saves
   • N's offer gains both countries, since 2.5 is more than 2 and N is giving up more
   • M's offer hurts N, since N is paid 1.5 tons for cloth that took N less work than that to make
   • Both offers gain both countries, since each country gets the good it wanted from the other
10. 7.

    Tala tests the third speaker's claim on card B with card A. What is the best verdict?

    • Weak: trading at 1.5 tons a bolt gets M cloth for less than the 2 tons it costs to make
    • Weak: M cannot make grain and cloth in the same worker-day, so the claim is about timing
    • Strong: N gains from the trade, which shows M has nothing left to gain from it
    • Strong: M makes more of both goods, so it gains nothing by buying cloth from another country

11. Use this

    Cards A to C on paying students to read (all made up for practice). Card A, "A reading reward (made up)". Written for this sheet. Summary in our words, not a quotation: 600 students were assigned by lottery to a reward group or a comparison group. The reward group was paid $2 for each book read. Over the semester the reward group read 9.0 books on average and the comparison group read 6.5. Test scores were 71 in both groups. Card B, "After the rewards stopped (made up)". Written for this sheet. Summary in our words, not a quotation: the next semester, with no rewards for either group, the former reward group read 5.8 books on average and the comparison group read 6.4. Card C, "Two views (made up)". Written for this sheet. Summary in our words, not a quotation: Speaker H says rewards work, since students read more. Speaker J says rewards make reading a chore, so students read less later.

12. 8.

    Ari weighs speakers H and J on card C against cards A and B. Which statement fits the evidence best?

    • J is right: the reward group later read less than the comparison group, so the rewards caused the drop
    • Both have a point: rewards raised reading by 2.5 books, then reading fell below the comparison group's
    • H is right: the reward group read 2.5 more books, which shows rewards raise reading for good
    • Neither: test scores were 71 in both groups, so reading changed nothing and neither speaker has a point
13. 9.

    Noah works out the cost per extra book in card A. What does it suggest about the program?

    • The cost is $2 for each extra book, which is the price the program pays for each book read
    • The cost is $18 for each extra book, the total paid to a student for the semester
    • About $7.20 for each extra book, since $2 is paid on all 9.0 books but only 2.5 are extra
    • The cost is about $2.80 for each extra book, since 2.5 extra books are bought with $7
14. 10.

    Speaker J says rewards cause students to read less later. What evidence would most help Kira test the claim?

    • Whether students in the reward group liked the books they read, since liking would explain later reading
    • Whether reading fell more in students whose rewards were taken away than in students who were never rewarded
    • Whether test scores of the comparison group changed in the second semester, since scores may have moved
    • Whether the 600 students were assigned by lottery, since the lottery decides whether the groups differ