If an Economic Action Generates More Costs Than Benefits, the Action

question 172

Multiple Choice

If an economic action generates more costs than benefits, the action

• A) by definition increases the nation's economic welfare.
• B) should not be undertaken from an efficiency standpoint.
• C) should be subsidized by the government in order to make sure that it is undertaken.
• D) is desirable from a public welfare standpoint even though many individuals will be harmed.

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Definitions:

Rebate

A consumer discount in which a portion of the purchase price is returned to the buyer in cash; the manufacturer, not the retailer, issues the refund.

Samples

Small portions or quantities of a product distributed free or at a minimal cost to serve as a representation of the whole, allowing potential customers to test before making a purchase.

Premiums

Items or services received for free or at a low cost as an incentive to purchase a product or service, or an additional cost for higher-quality services or products.

Deals

Offers or discounts provided by businesses on products or services to attract customers and increase sales.