5 MOL! – Marginal Costs

We discussed a highly simplified example yesterday. We made our lives easy with a key assumption:

You have already paid for the food in advance and thus there is no opportunity cost.

Let’s change the problem slightly. Suppose now you are in an Ala Carte restaurant, how do you decide how much to order and eat?

Continue reading →

Please follow and like us:

5 MOL! – Marginal

All of us have been to buffets.

Imagine that you’ve paid for one of your favourites, and now you are in.

How do you decide how much to eat?

Total Benefits

To simplify the problem, let’s assume there’s only one type of food. Your benefits curve is probably going to look something like the following.

Continue reading →

Please follow and like us:

5 MOL! – I don’t need sleep…

Yesterday we defined a rational person to be someone who chooses what is best for herself given an objective, which is self-defined.

When we say best, we mean what the person believes to be best. It doesn’t matter what others think, or what society thinks, or what actually is best.

Continue reading →

Please follow and like us:

5 MOL! – It’s all about me.

Before we proceed further, we want to clarify the definition of trade we used in last week’s posts. We chose to regard trade as synonymous with exchange, but in most economic texts you’ll find exchange being used in context of ‘trade between individuals’ whereas trade is reserved for ‘trade between countries’. It’s not a big difference in our opinion but we thought it is an important one to clarify.

Continue reading →

Please follow and like us: