3min chapter

Think Like An Economist cover image

S E8: The Law of Demand - How You Choose to Buy

Think Like An Economist

CHAPTER

How Many Coffees Should You Buy Each Week?

How many coffees should you buy each week? The marginal principle reminds you to ask instead, should i buy one more so betty, should you buy one more cup coffee? I'm going to need to apply the cost benefit principle to give you an answer. It says i should buy the extra cup of coffee if the benefit of that coffee exceeds the cost. Notice that betsy's comparing buying that coffee to her next best alternative, which is drinking a sad, bad cup of coffee from the staff lounge. She's using the opportunity cost principle, which says you should always ask or what and compare your choice to your next best alternative.

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