Question

Which of the following best reflects the principle of increasing marginal opportunity cost (or the law of diminishing returns)?

a. Two hamburgers cost twice as much as one hamburger
b.A large soda costs more than a small soda
c.Two more hours studying per week could raise your grade from a C to a B, but to raise it from a B to an A, would require 7 hours more studying per week
d. Marginal costs increase whenever marginal benefits do

Answer 1

c.

Step-by-step explanation:

Marginal opportunity cost refers to the otherwise nonexistent cost that the company has to pay in order to produce one additional unit of something. Therefore the best statement that reflects this principle would be that two more hours studying per week could raise your grade from a C to a B, but to raise it from a B to an A, would require 7 hours more studying per week. This is because moving from B to an A is one additional letter grade, but costs a lot more than moving from C to B.