Suppose that you have a choice between video games and movies. If the marginal benefit of a video game, in terms of movies forgone, exceeds the marginal cost, then your resources would be used most efficiently by
A) decreasing video games and movies.
B) decreasing video games and increasing movies.
C) increasing video games and decreasing movies.
D) keeping the status quo, that is, making no change.

Question

Quizplus · Accepted Answer

Choosing to increase video games and decrease movies would be the most efficient use of resources because the marginal benefit of a video game, in terms of movies forgone, exceeds the marginal cost. This means that the satisfaction or enjoyment gained from playing one more video game is greater than the satisfaction or enjoyment of watching one more movie, and the extra cost of giving up one movie to play one more video game is worth it. Therefore, reallocating resources towards more video games and fewer movies would result in the highest overall satisfaction or utility.

Suppose That You Have a Choice Between Video Games and Movies