Which of the following statements about rational choices is the most accurate?
A) They can only be made by comparing opportunity cost with the marginal cost.
B) They are made based on expectations of the additional benefits and additional costs involved.
C) They are based on a comparison of total benefits and total costs.
D) They measure benefits based on the past.

Question

Quizplus · Accepted Answer

Rational choices are made based on expectations of the additional benefits and additional costs involved. This involves weighing the marginal benefits against the marginal costs of a decision or action. Total benefits and costs may also be considered, but it is the expectation of additional benefits and costs that ultimately guides rational decision-making. Option A is incorrect because opportunity cost is just one component of rational decision-making. Option C is incorrect because it assumes that individuals have complete information about the total benefits and costs of a decision. Option D is also incorrect because rational choices are forward-looking and based on expectations of future outcomes, not past benefits.

Which of the Following Statements About Rational Choices Is the Most