onal benefits are greater than th the marginal costs: Suppose, for the second hour of studying, the marginal benefits are still greater than curve lies above the marginal has net benefits. But if you had MB studying second hour > MC studying second hour first hour-then you would h The same analysis holds for th Then you will study for the second hour, because the additional benefits are still greater not one minute longer), you than the additional costs. In other words, studying the second hour is worthwhile. In fact, consistent with MB = MC, you will continue to study as long as the marginal benefits are greater than the marginal costs. Exhibit 2 illustrates this discussion graphically. The marginal benefit (MB) curve of studying is downward sloping because we have assumed that the benefits of studying for the first hour are greater than the benefits of studying for the second hour and so on. The marginal cost (MC) curve of studying is THINKING upward sloping because we have assumed that studying the second hour costs a person LIKE AN ECONOMIST more (in terms of goods forfeited) than studying the first hour, studying the third hour costs more than studying the second, and so on. (If we assume that the additional costs of studying are constant over time, the MC curve is horizontal.) wouldn't be there. B EXHIBIT 2 reason is that peop with net benefits. T Efficiency MB, MC obtaining the add MB = marginal benefits and stooping down to MC = marginal costs. In the exhibit, the MB curve of MB = MC the marginal cos Saying that there studying is downward sloping MC of Studying leaves net bene and the MC curve of studying is upward sloping. As long I as MB > MC, the person MB > MC MC > MB will study. The person stops studying when MB = MC. This point is where efficiency 1-3f Econo is achieved. An incentive MB of Studying Often, w a action, she Time Spent to study fo Studying off, probab Efficient Number (hours) Incent of Hours to Study undertak which th