The Idea That an Action Should Be Undertaken If and Only

question 80

Multiple Choice

The idea that an action should be undertaken if and only if the benefits exceed the costs is known as the concept of

• A) economic efficiency.
• B) public welfare maximization.
• C) marginal comparative advantage.
• D) monetary construction of values.

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Definitions:

Public Good

A public good is a commodity or service that is made available to all members of a society, typically free of charge, funded by taxes, and characterized by non-excludability and non-rivalry.

Information Problems

Challenges encountered due to the lack of complete or accurate information, leading to suboptimal decisions and market failures.

Incentive to Acquire

Motivation or reason for individuals or entities to obtain or gain possession of assets.

Nonexcludable

Characterizes a good or service for which it is not possible to prevent individuals who do not pay from consuming it, leading to potential free-rider problems.