Question

After much consideration, you have chosen Cancun over Ft. Lauderdale as your Spring Break destination this year. However, Spring Break is still months away, and you may reverse this decision. Which of the following events would prompt you to reverse this decision?

a. The marginal cost of going to Cancun decreases.

b. The marginal cost of going to Ft. Lauderdale decreases.

c. The marginal benefit of going to Cancun increases.

d. The marginal benefit of going to Ft. Lauderdale decreases.

Answer 1

Answer:

The correct answer is B. The marginal cost of going to Ft. Lauderdale decreases.

Explanation:

Marginal cost refers to the change in cost of a product or service when there is one additional unit added to the production. In the given scenario, the decision is likely to be affected upon realizing the decreased marginal cost of going Ft. Lauderdale.

Over time, the situation might change and Ft. Lauderdale might seem like a better place both economically and otherwise to spend time and money at.