The amount of government expenditures on a project or program should continue to increase for as long as the marginal benefits exceed the marginal costs.

Question

Quizplus · Accepted Answer

This is based on the principle of marginal analysis, which involves comparing the additional benefits from a decision or action to the additional costs of that decision or action. As long as the marginal benefits are greater than the marginal costs, the government should continue to invest in the project or program. If the marginal costs begin to exceed the marginal benefits, then the government should consider reducing or terminating funding for the project.

The Amount of Government Expenditures on a Project or Program