From an economic perspective, a student's decision to go to the movies instead of studying for a test indicates that in the student's thinking the marginal benefit of studying is greater than the marginal cost of studying.
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Step 1: The student's decision to go to the movies instead of studying for a test indicates that the marginal benefit of studying is greater than the marginal cost of studying. Show more…
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Suppose the marginal costs of reading are constant and the marginal benefits of reading decline (over time). Initially, the marginal benefits of reading are greater than the marginal costs. Draw the marginal benefit curve and marginal cost curve of reading and identify the efficient amount of reading. Next, explain why the efficient point is the point at which the net benefits of reading are maximized.
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