Suppose that for the past two months, you have studied economics one hour a day. You now decide to study economics two hours a day. For the past two months
A) your marginal cost of studying economics for an hour must have exceeded its marginal benefit.
B) the marginal cost of studying economics must have fallen.
C) your marginal benefit from studying economics an hour must have been greater than its marginal cost.
D) the opportunity cost of studying economics must have risen.

Question

Quizplus · Accepted Answer

The decision to increase the time spent studying economics from one hour to two hours a day suggests that the marginal benefit (the additional benefit gained from an extra hour of study) was perceived to be greater than the marginal cost (the value of what you give up by studying an extra hour) during the initial period of study. This is because rational decision-making involves increasing an activity if its marginal benefit exceeds its marginal cost.

Suppose That for the Past Two Months, You Have Studied