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Created page with "'''Marginal thinking''' is the economic process of making optimal decisions by comparing the additional (marginal) benefits to the additional (marginal) costs of a specific ac..."
'''Marginal thinking''' is the economic process of making optimal decisions by comparing the additional (marginal) benefits to the additional (marginal) costs of a specific action, rather than focusing on total costs. It focuses on whether to add "one more unit" — such as one more hour of study or producing one more item—to maximize utility or profit, crucial for rational, incremental decision-making.
== Key Concepts of Marginal Thinking ==
* Marginal Benefit (MB): The extra gain from increasing an activity by one unit.
* Marginal Cost (MC): The extra expense or effort incurred by increasing an activity by one unit.
Decision Rule: If MB > MC, take the action. If MB < MC, do not take the action.
Ignoring sunk costs: Marginal thinking disregards past, unrecoverable costs (time or money already spent) and focuses only on future, incremental costs and benefits.
== Quote ==
"Rational people systematically and purposefully do the best they can to achieve their objectives, given the available opportunities.” - Principles of Macroeconomics 6th Ed. at 6
== See also ==
*[[Rational thinking]]
*[[Logical reasoning]]
== External links ==
*[https://www.econlib.org/library/Topics/College/margins.html Margins and Thinking at the Margin], Econlib.org
*[https://conceptually.org/concepts/marginal-thinking What does it mean to think on the margin?]
*[https://growthemind.ai/blogs/better-thinking/marginal-thinking-what-is-thinking-on-the-margin Marginal Thinking: What is Thinking on the Margin?]
*[https://medium.com/pronouncedkyle/marginal-thinking-a-mental-superpower-to-help-you-overthrow-the-bourgeoisie-12358263f509 Marginal Thinking — A Mental Superpower To Help You Overthrow the Bourgeoisie]
*[https://www.tutor2u.net/economics/blog/in-economics-what-is-thinking-at-the-margin In Economics - what is thinking at the margin?]
== Key Concepts of Marginal Thinking ==
* Marginal Benefit (MB): The extra gain from increasing an activity by one unit.
* Marginal Cost (MC): The extra expense or effort incurred by increasing an activity by one unit.
Decision Rule: If MB > MC, take the action. If MB < MC, do not take the action.
Ignoring sunk costs: Marginal thinking disregards past, unrecoverable costs (time or money already spent) and focuses only on future, incremental costs and benefits.
== Quote ==
"Rational people systematically and purposefully do the best they can to achieve their objectives, given the available opportunities.” - Principles of Macroeconomics 6th Ed. at 6
== See also ==
*[[Rational thinking]]
*[[Logical reasoning]]
== External links ==
*[https://www.econlib.org/library/Topics/College/margins.html Margins and Thinking at the Margin], Econlib.org
*[https://conceptually.org/concepts/marginal-thinking What does it mean to think on the margin?]
*[https://growthemind.ai/blogs/better-thinking/marginal-thinking-what-is-thinking-on-the-margin Marginal Thinking: What is Thinking on the Margin?]
*[https://medium.com/pronouncedkyle/marginal-thinking-a-mental-superpower-to-help-you-overthrow-the-bourgeoisie-12358263f509 Marginal Thinking — A Mental Superpower To Help You Overthrow the Bourgeoisie]
*[https://www.tutor2u.net/economics/blog/in-economics-what-is-thinking-at-the-margin In Economics - what is thinking at the margin?]