Marginal Thinking: Is One More Worth It?

Lucy is twelve years old. In November, her class holds a speech contest. Each student must give a three-minute speech about a hero, and Lucy picks Grandma Rose. She has two weeks to get ready, and she wants to do well.

On Sunday morning, Lucy sits in her room with her speech cards. Her friend Ella comes to listen. Ella gives a score from 0 to 100, just like a judge. Lucy goes first, and she forgets some words and speaks too fast. Her score is 50.

Lucy practices for one hour and then asks Ella to listen again. The score is 70. After a second hour, it is 82. After a third hour, it is 86. After a fourth hour, it is 87.

Lucy laughs and says, "The first hour was great, but the fourth hour did almost nothing."

Thinking About One More Hour

That evening, Lucy shows the numbers to Dad. Dad says, "Let's check the numbers."

He draws a table.

Dad says, "Look at the last column. Each hour adds less than the hour before. When you think about the extra from one more hour, you are using marginal thinking. Marginal means the extra amount from one more."

He continues, "The extra benefit is what you get from one more hour. The extra cost is what you give up for that hour."

For Lucy, every hour of practice has a cost. On Sunday afternoons, she plays soccer with her friends, and each hour of practice means less time on the field. She thinks about the numbers for a while. Then she says, "One soccer game is worth more to me than 4 extra points. But it is not worth more than 12 extra points."

Her decision is clear. The first two hours are worth it, and the third is not.

Back to the Speech Cards

Lucy practices for two hours and then closes her cards. She runs to the soccer field with her bag and joins her friends.

On contest day, her speech about Grandma Rose is smooth and warm. After the speech, Lucy thinks about the last hour that she did not use. She is not sad about it. She says to Ella, "I stopped at the right time."