Margins and Thinking at the Margin

Abstract

This text introduces readers to the concept of thinking at the margin in economics. Thinking at the margin means considering the incremental costs and benefits of a decision. It involves weighing the additional cost or benefit of taking the next action against its alternatives. The text presents several examples to illustrate this concept, such as deciding how many more tomatoes to grow in a garden or how much time to spend searching for a parking spot. The text also discusses the relationship between marginal thinking and the sunk cost fallacy, emphasizing the importance of focusing on future costs and benefits rather than past expenditures. – AI-generated abstract.