You're Deciding Whether to Install an $800 Moonroof and a $400

question 114

Multiple Choice

You're deciding whether to install an $800 moonroof and a $400 security system in your car. Suppose the marginal benefit from the moonroof is $700 and the marginal benefit from the security system is $600. The economic decision rule dictates that you should:

• A) purchase only the moonroof because that will provide you with the greatest marginal benefit.
• B) purchase only the security system because its marginal benefit exceeds its marginal cost.
• C) purchase both options because the combined cost of both is less than the combined benefit.
• D) not purchase either because the benefits of each do not exceed the costs.

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Definitions:

Epi-

A prefix meaning "on", "upon", or "above", often used in medical and scientific terms to indicate a layer or location.

Epi-

A prefix meaning "above" or "upon" that is used to form terms denoting objects or concepts that are on, over, near, at, before, or after something else.

Circum-

A prefix indicating 'around' or 'about', used in medical and general terms.

Tachy-

A prefix used in medical terms to denote rapid or accelerated, often referring to the rate of a heartbeat.