Home > Business > Detail
search_icon
Question

Your professor loves her work, teaching economics. She has been offered other positions in the corporate world that would increase her income by 25 percent, but she has decided to continue working as a professor. Her decision would not change unless the marginal A. cost of teaching increased B. benefit of teaching increased C. cost of a corporate job increased. D. benefit of a corporate job decreased.

Answer

The cost of teaching has risen. Explanation: Marginal cost, which refers to the extra cost incurred by continuing an activity such as labor or production, has increased. Economists advise that such activities should continue if the benefits derived from the additional output outweigh the marginal costs. However, in the case of a professor, an increase in marginal cost means that the benefits gained from teaching will decrease, resulting in a decline in income. This decrease in income may lead the professor to reconsider her decision to work as a teacher.