Question

Instead of studying for an additional two hours for the economics​ final, Leann decides to watch a movie. Leann is making A. an irrational decision because studying is more important than watching a movie. B. a decision that is not on the margin because she will see the entire movie. C. a decision that does not involve an opportunity cost. D. a rational decision if her marginal cost from the movie is greater than her marginal benefit from the movie. E. a rational decision if her marginal benefit from the movie is greater than her marginal cost of watching the movie.

Answer 1

E. a rational decision if her marginal benefit from the movie is greater than her marginal cost of watching the movie.

Step-by-step explanation:

A. Her decision is NOT irrational. In economics, the idea is that not one person can do only on task such as only studying, only eating, or only watching movies.
B. The question does NOT state the length of the movie nor the cost of the movie dvds, steam, or tickets.
C. The opportunity cost is her studying for the economics final which could cause her grade to be lower, but she gains a break by relaxing.
D. This is backwards, it should be marginal benefit compared greater than or equal to marginal cost.
E. Rational rule states that "if something is worth doing then keep doing it until the marginal benefit equals the marginal cost." - (Principles of Microeconomics)

Answer 2

Answer: Option A

Explanation: In simple words, rational decisions refers to those decisions which in overall basis results in the benefit of the decision maker.

The marginal cost refers to the addition to the total cost when more unit of output is produced and marginal benefit is the addition to the total benefit after one more unit.

Hence if the marginal benefit exceeds marginal revenue then the decision is rational as the decision maker will ultimately be in profit.