It’s often said that economics is counterintuitive. On the other hand, it’s also said that economics is about human behavior. This should imply that at least the basic ideas of economics should be pretty easy to understand and explain. (Assuming, of course, that you are in fact a human.)

One important point in economics is about the margin – thinking at the margin, decisions being made at the margin, and so on. On the one hand, it sometimes seems tricky to get people to understand what it means to make a decision at the margin, or to understand the difference between marginal cost and average cost. Some people attempt to illustrate the difference using math. You might, for example, give someone an equation for calculating total cost, and then tell them that marginal cost is the first derivative of total cost. Then, with a little basic calculus, they can work out the marginal cost of some process. This is neat, precise, and makes for tidy exam questions that are easy to grade. It’s also entirely possible to ace an exam full of these math problems and leave class at the end of the semester without ever really internalizing the idea of making a decision at the margin.

On the other hand, if people really do make decisions at the margin, shouldn’t it be easy to explain the concept to people by pointing out these decisions being made, in cases that are easy to understand and recognize? Yes, actually. Consider the following meme. If you recognize what the meme is saying and understand why it’s funny, then you intuitively understand the difference between average and marginal cost, and you understand what making a decision at the margin means:

Assuming you’re old enough to shave, you’ll immediately recognize this. Nonetheless, I’m going to break a cardinal rule of comedy and explain the joke.

Shaving cartridges are expensive. To make the math easy, let’s assume this pack costs $20. The average cost per cartridge is $5. As you use a razor, it gets duller, making it less comfortable and effective for shaving. So as the first cartridge wears down after five shaves, you switch to the second. Because you paid the full price for the pack up front, the marginal cost of tossing out the first cartridge for the second is essentially zero, while the marginal benefit is pretty high. The same holds true for tossing out the second for the third, and the third for the fourth. But once you start using the fourth, things change. Now the marginal cost of tossing out the fourth and switching to a new cartridge means paying the full price of a new pack. As a result, people stretch the fourth cartridge in the pack far longer than the first three. All four razors have the same average cost – but they don’t all have the same marginal cost when it comes to use and disposal. And because people make their decisions on the margin, you end up seeing the kind of behavior highlighted in the meme.

Unfortunately, there are people who can pass through economics programs with excellent grades on the basis of their high level of mathematical acumen, yet never absorb the economic way of thinking in a way that is presented by this simple meme. Math is a fine thing and certainly has legitimate uses in economics, but solving math problems isn’t the same thing as doing economic analysis.

There’s an old saying that if you can’t explain something in a way that an eight year old can understand it, then you don’t truly understand it yourself. Maybe there’s an analogy here. If you can put together a simple meme that highlights how indifference curves work, that demonstrates your understanding of the topic far more than calculating partial derivatives, using utility functions, or referencing budget lines. Anyone who’s decent at math can do the latter, particularly in the context of a classroom exam. But only someone who has really absorbed the idea can do the former.