How Fast to Sail? The margin principle can increase the level of an activity as long as its marginal benefit exceeds the marginal cost. Thinking at the margin allows us to adjust our decisions. As speed of any ship increases more fuel is consumed just as it happens with car. That is mileage per liter falls, but more speed means ship can travel faster and thus can load and unload fast-meaning it travels a greater number of times than a slow- moving ship than it gains by travelling more (transporting a greater number of times). This gain should be compared with loss from fall in mileage. When the gain in weight is equal to loss in mileage equilibrium is reached as in case of any marginal analysis.
How Fast to Sail? The margin principle can increase the level of an activity as long as its marginal benefit exceeds the marginal cost. Thinking at the margin allows us to adjust our decisions. As speed of any ship increases more fuel is consumed just as it happens with car. That is mileage per liter falls, but more speed means ship can travel faster and thus can load and unload fast-meaning it travels a greater number of times than a slow- moving ship than it gains by travelling more (transporting a greater number of times). This gain should be compared with loss from fall in mileage. When the gain in weight is equal to loss in mileage equilibrium is reached as in case of any marginal analysis.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:How Fast to Sail?
The margin principle can increase the level of an activity as long as its marginal benefit exceeds the
marginal cost. Thinking at the margin allows us to adjust our decisions. As speed of any ship increases more
fuel is consumed just as it happens with car. That is mileage per liter falls, but more speed means ship can
travel faster and thus can load and unload fast-meaning it travels a greater number of times than a slow-
moving ship than it gains by travelling more (transporting a greater number of times). This gain should be
compared with loss from fall in mileage. When the gain in weight is equal to loss in mileage equilibrium is
reached as in case of any marginal analysis.
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