Economic Concepts Worksheet
Concept Application of Concept from Personal Experience Reference to Concept in Reading
Marginal Analysis encompasses two key elements:
• Marginal Benefits
• Marginal Cost
Marginal analysis takes into account the costs and benefits associated with a choice. Determining if the costs outweigh the benefits (or vice-versa) assists in making decisions.
Marginal analysis was chosen because it is a diagnostic tool that can be used in effective decision making. In my previous job, I was employed by a biological laboratory. I worked on a specific bench testing whole blood for trace amounts of lead. I asked several times to move positions in order to obtain a better understanding of other instrumentation. However, I was very efficient at lead testing. Through my manager’s eyes, the benefit of me learning new testing was outweighed by the cost of moving me. From my point of view, the cost of moving me was outweighed by the benefit of learning new techniques. In the end, I stayed in the lead testing role because of the amount of work I was able to get done was superior to the time it would take to train someone to take my place.
At one point in my life, I was employed at a drug and alcohol rehabilitation center. The cost associated with a person getting involved in rehab was not only a set dollar amount, it requires that the individual forego income from a job for one month, time away from family, and a tremendous amount of emotional investment. The benefit is a clean and healthy life instead of a life filled with medical issues and emotional distress. Most individuals determined the benefit outweighed the cost. The marginal analysis did not always result in this outcome though, and some people decided they could “do it on their own”. Unfortunately, this rarely works. “The economic perspective focuses largely on marginal analysis – comparisons of marginal benefits and marginal costs.” (McConnell & Brue, 2004, p.4)...