What is marginal economy?
Believe it this way, which do you need more, gold or h2o?
Of program you need h2o more.
Which 1 will you pay more money for? One kilogram of gold or 1 kilogram of h2o? Of program, gold.
Why?
That's because in economy, only the marginal issues. What does that mean?
Water is precious.
However, the value of h2o is the value of that least useful h2o that you still use anyway.
You use h2o to consume, you use h2o to consider a shower, you use h2o to h2o your plants, then you use h2o to wash your automobile.
Obviously, the h2o that you consume is a lot more useful than the h2o that you use to wash your automobile. However, the value of h2o is the value of that least useful h2o.
Why is it so?
That is because you are trying to increase your profit. Of program, you use your h2o for what’s the most useful first.
Sure, but why is the value of h2o so low?
Say the value of h2o is greater than that. Say it is $five per gallon. The satisfaction you will get from washing your automobile is $one per gallon. Then you merely do not wash your automobile.
Say the value is decrease than that. The satisfaction of washing your automobile is $one per gallon. However, h2o is so abundant that its cost is only $.50. Then you will use h2o for stuffs that give even less satisfaction, this kind of as washing your house.
In reality, h2o can be so abundant that the cost is damaging. A damaging cost indicates that you are prepared to invest money to get rid that h2o. Such is the case during a flood.
In which case, you will really invest money to get rid of h2o, this kind of as purchasing h2o pumps. That is what happened to 1 of my grandmas because her house is frequently flooded.
What is the moral of the story? Be uncommon. When you are uncommon, you are valuable. When you are not uncommon, you are worthless.
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