How do marginal costs and benefits relate to trade-offs?

help to explain the trade-offs people make
evaluates the relative worth of choices
show an understanding of self-interest

Question

How do marginal costs and benefits relate to trade-offs? 

help to explain the trade-offs people make
evaluates the relative worth of choices
show an understanding of self-interest

rane · Answer

They're really the same thing. Every "trade-off" is on the margin. So when you elect to study one less hour for your economics exam, your tradeoff is the marginal benefit you received from whatever you did with that hour against the marginal cost of a lower grade on the exam.
Rate