Instead of Studying for an Additional Two Hours for the Economics

question 10

Multiple Choice

Instead of studying for an additional two hours for the economics final,Leann decides to watch a movie.Leann is making

• A) a decision that does not involve an opportunity cost.
• B) a rational decision if her marginal cost from the movie is greater than her marginal benefit.
• C) a rational decision if her marginal benefit from the movie is greater than her marginal cost.
• D) an irrational decision because studying is more important than watching a movie.
• E) a decision that is not on the margin because she will see the entire movie.

---

Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing to invest in one option over another.

Producer Surplus

The difference between the amount that producers are willing and able to sell a good for and the actual amount received due to a higher market price.

Producer Surplus

The divergence between the desired selling price of producers and the real price at which goods are sold.

Supply Curve Shift

A change in the supply curve, indicating a change in the quantity supplied at each price.