- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 1. The Firm and Market Structures
- Subject 3. Marginal Revenue, Marginal Cost and Profit Maximization
CFA Practice Question
The marginal benefit of going to a movie during the week is currently $6 for you. Assume that the price of going to the movies, $4, measures its marginal cost. Following the economic decision rule, you will ______
A. continue going to movies until the marginal benefit of doing so falls to zero.
B. choose not to go to any movies during the week.
C. continue going to movies until the marginal benefit of doing so falls below $4.
Explanation: You will continue to go to the movies until the marginal benefit falls beneath the marginal cost.
User Contributed Comments 3
| User | Comment |
|---|---|
| Criticull | If marginal benefit = marginal cost, you are indifferent, it does not mean you won't go or you will go. |
| tomalot | You will leave half way through the second movie |
| thebkr7 | Unless it's Starwars! |