Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / Suppose a person makes a choice that seems inconsistent with the cost-benefit principle
Suppose a person makes a choice that seems inconsistent with the cost-benefit principle.
Which of the following statements represents the most reasonable conclusion to draw?
A. The person (explicitly or implicitly) over-estimated the benefits or under-estimated the costs or both.
B. The abstraction of the cost-benefit principle is so great as to be unable to explain behavior.
C. The person does not grasp how decisions should be made.
D. The person is simply irrational.
E. Because people don't explicitly calculate benefits and costs, it is not surprising that choices are made which violate the cost-benefit principal.
Suppose a person makes a choice that seems inconsistent with the cost-benefit principle.
Which of the following statements represents the most reasonable conclusion to draw? A. The person (explicitly or implicitly) over-estimated the benefits or under-estimated the costs or both.
You don't need to be a student of economics to understand costs and benefits. Everybody gets it, and we all do it. Every time you say, "I don't want it for that much money," or "It's not worth it," or "I don't want to bother with that," you have done a cost-benefit analysis. Sometimes our estimates of the costs and benefits are not carefully thought out or are incorrect. That is the most likely way for things to turn out badly. An example might be that you choose not to attend your in-person classes without realizing that attendance or the quizzes are given in class affect your course grade. You did an analysis, but not a good one.
