What is a marzhinalizm?In economic perception of reality prevail the marginal analysis - comparison of extreme benefits and limit costs.
In this case the word marginal - “ limit “ - means “ additional “ “ additional “ or “ change of century. “
Almost all decisions make changes to the current situation. Should you continue study a year more? Whether it is worth spending monthly more money for a compact - disks or it is better to reduce this item of expenditure?
In the same way also the enterprises arrive: they have to make decisions, reduce or broaden staff working and, respectively, outputs?
Each such choice is connected with extreme benefits and - from - for limitations of resources - with limit costs. That such choice was rational, it is necessary to compare these two sizes.
For example, time - a limited resource. What you will begin to do if on Saturday you have two “ free “ hour? You could watch a basketball match with participation of a University team on TV. Extreme benefit here - pleasure from supervision over game. Limit costs represent benefit which you could receive from other occupations to which you preferred game. For example, study, jogging or dream.
If extreme benefit exceeds limit costs, then it will be rational to look at a match. But if you decide that limit costs exceed extreme benefit, then it is necessary to choose some other occupation.
At the national level the government too constantly makes decisions. These decisions are also connected with extreme benefits and costs. Increase in expenses on health care can mean cut in expenditure on financing of libraries, subsidies for lower-income strata or military safety.
In the world of limited resources the decision to receive the extreme benefit connected with the concrete choice always involves the limit costs connected with refusal of something of another. Again - free lunches do not happen.
One of surprising consequences of the decisions based on the marginal analysis consists that “ good “ it can appear too much. Though some goods and services are always desirable - education, health care, pure environment - actually we can receive them in excessive quantity. “ It is Too much “ happens when we bring production to such point in which limit costs (value of the missed opportunities) are equal to extreme benefit.
If we decide to develop health care to such an extent that its limit costs for society will exceed extreme benefit, then we will provide “ it is too much “ health care, though health protection in itself - business good. If limit costs of health care exceed its extreme benefits, so we sacrifice alternative services (for example, education or reduction of environmental pollution) which are bigger value, than health protection in extreme value, that is, at the accounting of the last unit of costs and benefits.
What role is played by the marginal analysis in your life - to solve to you. The main thing not to forget that, making this or that decision, we always endow something, we refuse something. Be attentive and moderately slow behind this everyday occupation.
On it at me all. Happiness and welfare to you, to fast meetings!]