Suppose you are thinking about spending an additional hour studying for your next microeconomics exam.You should spend that extra hour studying as long as
A) the extra study time leads to a higher grade on the exam.
B) your only other alternative is spending an hour reading a novel.
C) the benefit of an additional hour of study is greater than what you have to give up in order to study one more hour.
D) you enjoy studying microeconomics.

Question

Quizplus · Accepted Answer

The key consideration for making the decision to spend an additional hour studying is whether the benefit of studying for an extra hour is greater than the opportunity cost of spending that hour doing something else. Option A is correct in that better grades are generally a benefit of studying more, but it does not address the opportunity cost. Option B is not a relevant consideration here because it assumes that reading a novel is the only other option. Option D is a personal preference that is not relevant to the decision-making process. Therefore, the best choice is C, which takes into account both the benefits and the costs of spending an additional hour studying.

Suppose You Are Thinking About Spending an Additional Hour Studying