perhaps, of a decent vacation. If you describe the opportunity cost as “a nice vacation” instead of “$5 a day,”

you might make different choices.

Marginal Decision-Making and Diminishing Marginal Utility

The budget constraint framework helps to emphasize that most choices in the real world are not about getting

all of one thing or all of another; that is, they are not about choosing either the point at one end of the budget

constraint or else the point all the way at the other end. Instead, most choices involve marginal analysis,

which means examining the benefits and costs of choosing a little more or a little less of a good. People

naturally compare costs and benefits, but often we look at total costs and total benefits, when the optimal

choice necessitates comparing how costs and benefits change from one option to another. You might think of

marginal analysis as “change analysis.” Marginal analysis is used throughout economics.
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