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Question

A rational decision maker does which of the following? 

A Takes an action only if the combined benefits of that action and previous actions exceed the combined costs of that action and previous actions Correct Answer Incorrect Answer
B Takes an action only if the marginal benefit of that action exceeds the marginal cost of that action Correct Answer Incorrect Answer
C Ignores marginal changes and focuses instead on "the big picture" Correct Answer Incorrect Answer
D Ignores the likely effects of government policies when he or she makes choices Correct Answer Incorrect Answer
E Both 1 and 2 Correct Answer Incorrect Answer

Solution

Rational decision maker takes an action only if the marginal benefit of that action exceeds the marginal cost of that action.

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