Asked by Alicia Ebding on Jul 21, 2024

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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.

Marginal Benefit

The additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.

Marginal Cost

The increase in cost that arises from producing an additional unit of a good or service.

  • Perceive the rational behavior assumption's role in economics and its outcomes for decision-making behaviors.
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fernando caballeroJul 23, 2024
Final Answer :
E
Explanation :
Rational economic decision makers will only make a change if the expected marginal benefit of the change exceeds the expected marginal cost. This means that they will only make a change if the benefits outweigh the costs, taking into account any uncertainties and risks involved. Therefore, option E is the correct answer. Options A, B, C, and D are incorrect because they do not take into consideration the concept of marginal benefit exceeding marginal cost, which is the basis for rational economic decision making.