Which concept is most useful in understanding how the cost of a college education has risen over time?

• A. Marginal utility
• B. Law of diminishing returns
• C. Comparative advantage
• D. Supply and demand

Answer: (D)

Verified step by step guidance

1. Step 1: Identify the key economic concept that explains price changes over time. In this case, the cost of a college education is a price, so we need to consider concepts related to price determination.
2. Step 2: Understand that 'Marginal utility' relates to the additional satisfaction from consuming one more unit of a good, which is more about consumer choice than price changes over time.
3. Step 3: Recognize that the 'Law of diminishing returns' deals with production inputs and output, explaining how adding more of one input eventually yields smaller increases in output, which is more relevant to production efficiency than price trends.
4. Step 4: Know that 'Comparative advantage' explains how individuals or countries benefit from specializing in goods where they have lower opportunity costs, which is about trade and specialization rather than price changes over time.
5. Step 5: Conclude that 'Supply and demand' is the most useful concept here because it directly explains how prices are determined by the interaction of the quantity of education supplied (colleges, resources) and the quantity demanded (students seeking education), which can cause the cost of college education to rise over time.