Instead of studying for an additional two hours for the economics final, Leann decides to watch a movie. Leann is making A. an irrational decision because studying is more important than watching a movie. B. a decision that is not on the margin because she will see the entire movie. C. a decision that does not involve an opportunity cost. D. a rational decision if her marginal cost from the movie is greater than her marginal benefit from the movie. E. a rational decision if her marginal benefit from the movie is greater than her marginal cost of watching the movie.

Question

Jordin Mcdaniel

Business

23 October, 17:21

Instead of studying for an additional two hours for the economics final, Leann decides to watch a movie. Leann is making A. an irrational decision because studying is more important than watching a movie. B. a decision that is not on the margin because she will see the entire movie. C. a decision that does not involve an opportunity cost. D. a rational decision if her marginal cost from the movie is greater than her marginal benefit from the movie. E. a rational decision if her marginal benefit from the movie is greater than her marginal cost of watching the movie.

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Armando Joseph · Answer 1

Answer: Option A

Explanation: In simple words, rational decisions refers to those decisions which in overall basis results in the benefit of the decision maker.

The marginal cost refers to the addition to the total cost when more unit of output is produced and marginal benefit is the addition to the total benefit after one more unit.

Hence if the marginal benefit exceeds marginal revenue then the decision is rational as the decision maker will ultimately be in profit.