(4) How Economists Think and Analyze III: Marginal Analysis
Economic Methodology, Economic Modeling Procedures, Economic Thinking, Marginalism, Maximizing, Self Interest, Markets and Exchange, Marginal Benefits, Marginal Costs
This provides a summary of the general analytic methodology used in economics. It discusses the key assumptions associated with the "economic way of thinking." It discusses scarcity, simplification, maximizing behavior, market exchange and the concept of "marginalism." It introduces the key economic decision rule of balancing marginal benefits against marginal costs.
Crane, Steven E., "(4) How Economists Think and Analyze III: Marginal Analysis" (2011). Principles of Microeconomics. Paper 64.
Ability to explain the general economic modeling process. Ability to explain key economics concepts of marginalism, maximizing behavior, and the constraining influence of competition in markets. Ability to explain how there can be mutual gains from exchange in a market transaction.
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