Rational ignorance is the decision NOT to
A) acquire information because the marginal cost of doing so equals the expected marginal benefit.
B) follow the principle of minimum differentiation.
C) acquire information because the marginal cost of doing so exceeds the expected marginal benefit.
D) acquire information because the marginal benefit of doing so exceeds the marginal cost.
E) vote in elections.

Question

Quizplus · Accepted Answer

Rational ignorance is the decision NOT to acquire information because the marginal cost of doing so exceeds the expected marginal benefit. This means that the cost of acquiring information outweighs the potential benefit of that information. Therefore, option C is the correct choice. Option A is incorrect because it states that rational ignorance is the decision to not acquire information when the cost equals the benefit, which is not true. Option B is incorrect because it refers to a different concept, the principle of minimum differentiation. Option D is also incorrect because it describes the opposite of rational ignorance, where the benefit of acquiring information exceeds the cost. Option E is partially correct, but it is not a complete definition of rational ignorance.

Rational Ignorance Is the Decision NOT to