Question

Sarita is trying to decide if she should spend another hour studying for the Economics test. She figures out that the marginal benefit of studying is greater than the marginal cost. So Sarita is better off _____.

A.) Not studying for another hour

B.) Studying for another hour

Answer 1

it's better studying for another hour because it's drilled into her head all of the work, but not studying for another hour means you just spent 2 hours doing nothing!

Answer 2

Sarita is better off studying for another hour.

Marginal benefit is the additional satisfaction one gains from an additional unit of an activity.

Marginal cost is the additional cost from an additional unit of an activity.

The marginal benefit of studying is grater than the marginal cost means that adding another hour of studying will increase its benefits. In other words, the gained knowledge during the one hour of study is greater than the effort Sarita had to put into studying. If the effort was greater than the benefit, the marginal cost would be grater too and there wouldn't be any reason to study for additional time.