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.

Marginal cost refers to the additional expense resulting from the continuation of activity, mainly labor or production. Economist encourages further production or hiring of labor if the benefits derived from the additional output exceed marginal costs.

In the case of the professor, an increase in marginal cost means the benefits she earns from the teaching will reduce. In other words, her current income will decline. A decrease in income will make her change her mind about workings as a teacher.