It May Be Rational to Be Ignorant About an Issue

question 188

True/False

It may be rational to be ignorant about an issue if the costs of being educated about it outweigh the benefits.

---

Definitions:

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive in the market.

Allocative Efficiency

A state of resource allocation where goods and services are distributed according to consumer preferences in a way that maximizes utility.

External Benefits

Advantages that result from a product or service's use that affect someone other than the direct consumer or producer, often justifying government intervention.

Consumption

The process by which goods and services are used by households and individuals, leading to a decrease in their availability.