Answer to Question #141625 in Macroeconomics for Beverly Jeff

Question

Andy wants to maximize his grade point average. Having spent six hours studying for his final exam in economics, Andy calculates his grade point average and discovers that even with a perfect score on the final, he will not pass the course. He decides to study two more hours so he will not have wasted the first six hours. Is this a good decision?

Answer 1

Answer: This is not a good decision by Andy because two more hours of study will not change the outcome of the course. The concept of the law of diminishing returns can be applied here in the sense that, Andy has already reached his optimal grade point and any extra effort applied on his part will only result in decreased productivity. The law of diminishing returns states that; if you increase the input in the production of a commodity while other factors of input are held constant, a point will reach when additional input results in progressively smaller increases in output. If the extra time proves to be excessive, the overall performance of Andy may result in a negative outcome on his final. As explained by the law of diminishing returns, adding excessive input while all other factors of input are kept constant can lead to the total loss of output due to inefficiency.

Therefore, if Andy decides to study for two more hours, he can potentially decrease his final grade points and still fail the course.

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