Asked by Ciara Lawrence on Jun 09, 2024
Verified
A student is trying to decide whether to study for the upcoming exam or play video games.The optimal amount of time spent studying is:
A) where the total benefit of studying is equal to the total cost of studying.
B) where the marginal benefit of studying is equal to the total cost of studying.
C) where the marginal benefit of studying equals the marginal cost of studying.
D) where the total benefit of studying equals the total cost of studying.
Marginal Benefit
The additional satisfaction or utility gained from consuming one more unit of a good or service.
Marginal Cost
The price associated with manufacturing an additional unit of a product or service.
Studying
The act of devoting time and attention to gain knowledge on a particular subject or to prepare for exams.
- Recognize and calculate approaches for optimizing profits, including the evaluation of marginal revenue against marginal cost.
Verified Answer
JM
Jordan McFannJun 12, 2024
Final Answer :
C
Explanation :
The optimal amount of time spent studying is where the marginal benefit (the additional benefit gained from one more minute of studying) equals the marginal cost (the additional cost in terms of time, effort, etc. of studying for one more minute). This is because at this point, the student is maximizing their benefit from studying without incurring additional costs that outweigh the benefits. Therefore, the best choice is to allocate time such that the marginal benefit of studying equals the marginal cost of studying.
Learning Objectives
- Recognize and calculate approaches for optimizing profits, including the evaluation of marginal revenue against marginal cost.