Question

Marginal analysis and decision-making:

Concept: The Fundamental Assumption of Economics

All social phenomena emerge from the actions and interactions of individuals who are choosing in response to expected marginal benefits and expected marginal costs to themselves.

• Definition: Marginal is additional or incremental (amount of increase) or decremental (amount of decrease).
• Should I do (choose) activity x?
• MC(x) = the additional costs of doing x
• MB(x) = the additional benefits of doing x

Rule:

• If Expected MB(x) > Expected MC(x), do x; otherwise don't.

Question: How would you use this concept to determine when to get married?

Answer 1

If at a point of time,

Expected Marginal Benefit of Marriage > Expected Marginal Cost of Marriage

Then, that point of time when the above condition is satisfied, is the correct time to get married.