If a Person Takes an Action If, and Only If

question 143

Multiple Choice

If a person takes an action if, and only if, the extra benefits from taking that action exceed the extra costs, then that person is:

• A)not following the Cost-Benefit Principle.
• B)following the Scarcity Principle.
• C)following the Cost-Benefit Principle.
• D)not rational.

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Definitions:

Goods

Tangible products or items that satisfy human wants or needs.

Budget Constraint

An economic model that represents all the combinations of goods and services that a consumer can afford with a fixed amount of income.

Goods

Physical items that are produced and consumed by individuals or businesses to satisfy needs or wants.

Marginal Rate

The rate at which one variable changes relative to a change in another variable, often used in the context of marginal tax rates or marginal rates of substitution.