Rational Economic Decision Makers Will Make a Change Only If

question 12

Multiple Choice

Rational economic decision makers will make a change only if

• A)the change is free of risk
• B)there are no costs involved
• C)their expectations are correct
• D)there is no uncertainty about the results of the change
• E)the expected marginal benefit exceeds expected marginal cost

---

Definitions:

Goods

Physical items that satisfy human wants or needs, which can be bought, sold, or traded.

Maximizing Utility

The process or goal of obtaining the highest level of satisfaction or benefit from the consumption of goods and services, given constraints like income.

Utility

A measure of satisfaction, usefulness, or value that an individual or society derives from a good or service.

Consuming

The act of using up goods or services either by purchasing or utilizing them.