📚 Learning Guide
Understanding Marginal Analysis
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Maria is preparing for her AP Microeconomics exam and is considering how many review sessions to schedule. She estimates that each session will provide her with a marginal benefit of 20 points to her knowledge, but each session will also cost her 2 hours of her time. If she has 16 hours available to review, how should Maria apply marginal analysis to optimize her study sessions?

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Choose the Best Answer

A

She should schedule all 8 review sessions since the marginal benefits outweigh the costs.

B

She should schedule 4 review sessions because she should not exceed a total study time of 8 hours.

C

She should schedule only 2 review sessions because the time cost is too high compared to the benefits.

D

She should schedule as many sessions as possible until her total study time is used up, regardless of marginal benefits.

Understanding the Answer

Let's break down why this is correct

Answer

Maria should use marginal analysis to decide how many review sessions to schedule by comparing the benefits of each session to the costs in terms of time. Each session gives her a marginal benefit of 20 points but costs her 2 hours, so she needs to think about how many points she gains for every hour spent. If she has 16 hours available, she can calculate how many sessions fit into that time while maximizing her total points. For example, if she uses all 16 hours for 8 sessions, she would gain 160 points, which is beneficial. However, if she finds that after a certain number of sessions the extra points gained do not outweigh the time spent, she should stop scheduling more sessions to avoid diminishing returns.

Detailed Explanation

Maria should schedule all 8 sessions. Other options are incorrect because This answer suggests Maria should limit her time too early; This option thinks the time cost is too high.

Key Concepts

Marginal Analysis
Cost-Benefit Evaluation
Utility Maximization
Topic

Understanding Marginal Analysis

Difficulty

medium level question

Cognitive Level

understand

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