Question

Russell spends an hour studying instead of playing basketball. Russell’s willingness to study is due to the fact that he... Your answer:
a. must enjoy studying more than he enjoys playing basketball.
b. believes the marginal cost of studying an extra hour is immensely challenging.
c. feels the marginal benefit of an extra hour of studying exceeds the marginal cost of not playing basketball.
d. considers his opportunity cost to be zero.

Answer 1

Answer:

The correct answer is letter "C": feels the marginal benefit of an extra hour of studying exceeds the marginal cost of not playing basketball.

Explanation:

In decision-making, an analysis of benefits-costs is essential to select the choice with the greatest return. If the marginal benefit of the choice is greater than the marginal cost, it is reasonable to take that option. If the marginal cost is greater than the marginal benefit, it is convenient to leave that option behind.

Thus, Russell must have considered the marginal benefit of an extra hour studying greater than the marginal cost of not playing basketball. That is the reason why he rather spent an hour with his books than with a basketball.

Answer 2

Answer:

c. feels the marginal benefit of an extra hour of studying exceeds the marginal cost of not playing basketball.

Explanation:

Russel made a choice to study for an hour instead of playing basketball. When making choices people weigh the benefits of an action against its opportunity cost.

Opportunity cost is the forgone alternative when we choose to do something.

In this instance Russell chose to study and the opportunity cost was to enjoy playing a basketball game.

For him to choose to study it means he saw the benefit of reading to be greater than the marginal cost of playing basketball. So he chose the most beneficial activity for him.