Marginal Analysis

Read this article to learn about one of the fundamental terms in economics: marginal analysis. Specifically, understand the concept of marginal benefit and marginal cost and what is meant in economics when we say that individuals make rational choices at the margin. Also, complete the problems in the "Try It" box and check your answers.

Glossary

marginal analysis:

examination of decisions on the margin, meaning comparing costs of a little more or a little less

marginal benefit:

the difference (or change) in what you receive from a different choice

marginal cost:

the difference (or change) in cost of a different choice