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Econlib QuickPicks- Margins: A Revolutionary Way of Thinking


Welcome to Econlib QuickPicks!

Each month, we send a collection of resources about a particular topic right to your inbox. This month, we're visiting one of the core insights of economics- marginal analysis, or thinking on the margin. What does it mean to think on the margin? It means to think about your next step forward. Thinking in this way has lots of applications, and they go well beyond economics. Thinking on the margin can provide an important guide for navigating any sort of choice situation. The "discovery" of this method of thinking was so important in the history of economics, it was dubbed a revolution.

We hope this collection helps you explore this month's topic. We'd also like to hear from you... How did you enjoy this month's collection? What have we failed to consider? And perhaps most interestingly, what did you do with this collection? Please let us know at econlib@libertyfund.org


(By the way, we'd love to know what future QuickPicks topics you'd like to see. Drop us a line with your suggestions today.)
 

Margins & Thinking at the Margin
The word “marginal” means “additional.” The first glass of lemonade on a hot day quenches your thirst, but the next glass, maybe not so much. If you think at the margin, you are thinking about what the next or additional action means for you.
Biography: William Stanley Jevons
Jevons was one of three men to simultaneously advance the marginal revolution, which held that the utility (value) of each additional unit of a commodity—the marginal utility—is less and less to the consumer. When you are thirsty, for example, you get great utility from a glass of water. Once your thirst is quenched, the second and third glasses are less and less appealing...
For Discussion: Marginal Thinking at the Museum
What's marginal cost pricing, and why is it such a big deal to economists? How might art musuems better utilize it, and what would that look like in your favorite musuem?
Concise Encyclopedia: Marginalism
Economists believe that sensible choice requires comparing marginal utilities and marginal costs. They also think that people apply the marginalism concept regularly, even if subconsciously, in their private decisions.
Biography: Carl Menger
Menger has the twin distinctions of being the founder of Austrian economics and a co-founder of the marginal utility revolution. Unlike Jevons, Menger did not believe that goods provide “utils,” or units of utility. Rather, he wrote, goods are valuable because they serve various uses whose importance differs. 
Costs, Cancer, and Making Better Choices
A sound understanding of the interrelated ideas of opportunity cost, marginal cost, and sunk costs can provide important guidance in navigating almost any situation of choice. Even those that we don’t think of as economic.
Think on the Margin
Most issues in economics and in life are not all or nothing, but more or less. That’s where thinking on the margin comes in... When you start thinking on the margin, you notice that, for many decisions, the margin is more important than the average.
Biography: Leon Walras
One of the founders of the “marginal revolution.” But Walras’s biggest contribution was in what is now called general equilibrium theory. Before Walras, economists had made little attempt to show how a whole economy with many goods fits together and reaches an equilibrium. Walras’s goal was to do this...
Further Reading from Israel Kirzner
How did economics come to be seen as more about welfare than about wealth? The marginal revolution is part of the answer, as Kirzner describes in his classic history of the evolution of economic thought.
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