📚 Learning Guide
Marginal Analysis
easy

A student decides to study for an extra hour for an exam. The additional hour of study increases their understanding but also means they miss a social event. How would you classify the decision based on marginal analysis?

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Choose the Best Answer

A

The marginal benefit of studying outweighs the marginal cost of missing the event.

B

The marginal cost of studying is zero because education is always beneficial.

C

The marginal benefit of socializing outweighs the marginal cost of not studying.

D

The decision has no marginal costs since the student is not spending money.

Understanding the Answer

Let's break down why this is correct

Answer

Marginal analysis is a way to evaluate the benefits and costs of a decision by looking at the additional or "marginal" effects. In this case, the student chose to study for an extra hour, which improved their understanding of the material, likely increasing their chances of doing well on the exam. However, this decision also meant they missed out on a social event, which could have provided enjoyment and relaxation. To classify this decision, we would weigh the benefit of better exam preparation against the cost of missing the social event. If the student believes that the improvement in their exam performance is worth more than the fun of the event, then they made a rational choice based on marginal analysis.

Detailed Explanation

The student gains more understanding from studying than they lose by missing the event. Other options are incorrect because This idea suggests studying has no cost, which isn't true; This choice thinks socializing is more important than studying.

Key Concepts

Marginal Benefit vs. Marginal Cost
Opportunity Cost
Consumer Surplus
Topic

Marginal Analysis

Difficulty

easy level question

Cognitive Level

understand

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