Question

Suppose that the expected exam scores from studying economics for 0, 1, 2, or 3 hours are 65, 80, 90, and 95 points, respectively, while the expected exam scores for studying 0, 1, 2, or 3 hours of accounting are 50, 65, 70, and 70 points, respectively. With 3 total hours of study time, your combined scores can be maximized by spending _______ hours studying economics. 1 2 3 4

Answer 1

Option A.

• With three total hours of study time, your combined scores can be maximize by spending 1 hours studying economics.
• We know that the marginal benefit is the additional benefit or satisfaction that a person gets by by selecting a choice when other choices are present.
• With one hour of studing economics, a person can score 80 Mark's and he can score only 65 marks if he spends 1 hour for accounting.
• This shows that the marginal benefit in terms of the economics score is 15 points ( 80-65) if a person spends 1 hour for it.
• Hence he can get marginal benefit of 15 point's by spending 1 hour studying economics.