I read Handbook of thinking smart, the third book that was written by a Vietnamese author - Kien Tran. I started to follow him in 2018. His first book - Handbook of IELTS motivated me to learn English from a zero to an intermediate. Although he received a bad reputation due to a fake IELTS certificate and other bad things, I still found a lot of useful advice in his books. Today, I'm gonna share the first chapter of this book with you.
Marginal Revenue vs Marginal Cost (MR vs MC)
You make decisions every day. Have you ever considered what you are doing is valuable or not?
In this chapter, he introduces a famous concept in economics that you can apply immediately.
Always compare Marginal Revenue (MR) and Marginal Cost (MC).
MR is a benefit you get after you make a product.
MC is a cost you pay after you make a product.
Example 1
You hesitate to stay up an hour to do some IELTS reading exercises.
What is MR? It is a benefit you get after an hour of practicing IELTS.
What is MC? It is a cost you pay after an hour of practicing IETLS.
It's 9 PM. If you stay up to 10 PM, you might finish 10 exercises. So 10 exercises are your MR.
Will you lose anything in that hour? Not much. You are not sleepy. You only lose an hour for doing something else. Therefore, MR > MC. You lose an hour to finish 10 exercises. You are happy and satisfied.
Example 2
Example 2 is similar to the one above, but instead of 9 PM to 10 PM, it is 3 AM to 4 AM.
What is MR? It is a benefit you get after an hour of practicing IELTS. You'll be sleepy, so you might not finish 10 exercises. Maybe 7. MR is 7 exercises.
What is MC? It is a cost you pay after an hour of practicing IETLS. You stay up very late, your cost is very high. You might wake up languidly the next morning and couldn't focus on anything.
In that situation, you should NOT stay up late to practice IELTS because of MR < MC.
Conclusion
MR and MC always exist in most situations. To make a better decision, you should determine them quickly.
Always compare MR with MC when making decisions on when.