Question

Suppose that your local police department recovers 100 tickets to a big NASCAR race in a drug raid. It decides to distribute these to residents and announces that tickets will be given away at 10 am Monday morning at City Hall.
The groups of people most likely to get the tickets will be those for whom the expected marginal _____ of going are greater than the expected marginal _____.

Answer 1

Answer:

The correct answer that fills the gap are: Benefits; cost.

Explanation:

The benefit that arises from increasing an activity is called a marginal benefit. For example, imagine that you spend four nights a week studying and that your average grade is 7 (on a scale of 10). As you want to upload your notes, you decide to study one more night per week. Its average rating increases to 7.5.

The cost of an increase in an activity is called marginal cost. For you, the marginal cost of increasing your study time one night per week is the cost of the additional night that does not happen with your friends (if that is the best alternative to spend your time). This cost does not include that of the four weekly nights that you already dedicate to the study.

To make your decision, you must compare the marginal benefit of an additional study night with the marginal cost. The sensible thing is to study the additional night. If the marginal cost exceeds the marginal benefit, there is no reason to study the additional night.

When we evaluate the benefits and marginal costs we choose only those actions that offer more benefits than costs, we are using our scarce resources in the most advantageous way possible.