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He would be faced with deciding whether he must spend all his available resources on goods or services, or whether he must save some of his income so that he would be able to finance some of his needs of his future. When he is taken as a labor resource, he must make the decision whether he must use his time in working for his pay, or whether he must spend it on sleeping and other leisure time activities. ("Decision making using marginal analysis," n. d.)
Similarly, when he is a labor resource, he must decide how much of his time he must spend on education, so that he may be able to maximize his life earnings. On the other hand, if he were an entrepreneur, then he must make the decision on how many people he must hire, or how much he must spend on acquiring a new product or service, which would help him increase production. In short, it is obvious that all economic decisions yield certain benefits to, and also at the same time impose certain costs on the decision maker involved in the decision making process. If the decision maker were to follow a simple rule, which is: continue to engage in a particular activity, as long as the marginal benefit seems to be greater than or equal to the marginal costs. The best and optimal decision would take place when the marginal benefits were to equal marginal costs, thereby enabling the decision maker to make the best use of the resources that he has at his disposal when he has made his decision. ("Decision making using marginal analysis," n. d.)
Another example of the practical application of economic theory and marginal analysis would be that of the agricultural researchers and analysts of Florida who have used economic analysis in the decision making process that they have had to indulge in when they had to decide whether to use alternative agricultural technologies that would improve their income. This can be compared to previous years when agriculturists...
Today, when economic theories are applied, agriculturists consider how the proposed new technologies and all the associated risks, for example, would impact the profitability of using the new technologies. (Evans, 2005)
To conclude, it must be said that economic theory can be applied in any sector, and especially in areas where one wishes to analyze one's profits against one's investments. Today, more and more people have started to apply these practical theories within their organizations and even otherwise, and thereafter, enjoying the benefits of such analyses.
References
Evans, Edward. (2005) "Marginal analysis, an economic procedure for selecting alternative technologies/practices." University of Florida, Institute of Food and Agricultural Sciences. Retrieved 15 December, 2007 at http://edis.ifas.ufl.edu/FE565
Johnson, Paul. M. (2005) "Marginal Analysis: A glossary of political economic terms" Retrieved 15 December, 2007 at http://www.auburn.edu/~johnspm/gloss/marginal_analysis
McConnell, Campbell R; Brue, Stanley L. (2005) "Economics, principles, problems and policies" McGraw-Hill Professional.
McEachern, William a. (2006) "Macroeconomics, a contemporary introduction" Thomson
N.A. (n. d.) "Decision making using marginal analysis" Retrieved 15 December, 2007 at http://people.eku.edu/watkinst/Economics%20120/Decision-making.doc
N.A. (n. d.) "Marginal analysis, a key to economic analysis" Retrieved 15 December, 2007 at http://www.cals.ncsu.edu/course/are012/lectureppt/lectur10.ppt
N.A. (n. d.) "Marginal analysis," Retrieved 15 December, 2007 at http://sorrel.humboldt.edu/~economic/econ104/marginal/
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