A Rational Decision Maker Takes an Action If and Only

question 9

Multiple Choice

A rational decision maker takes an action if and only if

• A) the marginal benefit of the action exceeds the marginal cost of the action.
• B) the marginal cost of the action exceeds the marginal benefit of the action.
• C) the marginal cost of the action is zero.
• D) the opportunity cost of the action is zero.

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Definitions:

Incentive

An object, person, or situation perceived as capable of satisfying a need or as desirable for its own sake.

Drive

A condition of arousal in an organism that is associated with a need.

Need

A state of deprivation.

Desire

A strong feeling of wanting or wishing for something to happen or be obtained.