According to marginal analysis, you should spend more time studying economics if the extra benefit from an additional hour of study:
A. is positive.
B. outweighs the extra cost.
C. exceeds the benefits of the previous hour of study.
D. will raise your exam score.
Answer (2)
b. outweighs the extra cost.
Marginal analysis is the investigation of the ongoing variations in the correlation between economic subjects. This process properly examines the additional advantages of a certain activity and comparing the further expenditures it takes. The important aspects in this type or analysis encompasses the marginal revenue, marginal rate of substitution, marginal product, marginal propensity to save, marginal cost and etc.
Furthermore, many firms invest in marginal analysis to create better and make the best out of their returns in investments.
The correct choice is B: you should spend more time studying economics if the extra benefit from an additional hour of study outweighs the extra cost. This means you should continue studying as long as the benefits exceed the costs. Marginal analysis helps determine the most efficient use of resources, including your study time.
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