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Studying for an Exam:

You've studied for 5 hours already. Should you study for 1 more hour?

Marginal benefit: Will you learn something important that helps improve your grade?

Marginal cost: You’ll give up an hour of sleep or relaxation.

If the extra studying is worth more than the cost, you study. If not, you take a break.


Key Idea:

Instead of making "all-or-nothing" decisions, you think step by step, evaluating whether the small change is worth it.


What Does "Thinking at the Margin" Mean?

Thinking at the margin means making decisions by considering the additional (or marginal) benefits and additional (or marginal) costs of a small change in what you're already doing.

It’s about asking, "What happens if I add or subtract just one more unit?"

















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