Suppose that the extra cost to Tim of a third glass of soda is zero because he's at a restaurant that gives free refills. According to the Cost-Benefit Principle Tim should:
A)drink a third glass of soda.
B)drink a third glass of soda if the extra benefit of doing so is positive.
C)drink a third glass of soda if his total benefit from drinking soda is positive.
D)not drink a third glass of soda.

Question

Quizplus · Accepted Answer

According to the Cost-Benefit Principle, an individual should take an action if, and only if, the extra benefits of taking the action are at least as great as the extra costs. In this case, since the extra cost of a third glass of soda is zero, Tim should drink a third glass as long as the extra benefit of doing so is positive.

Suppose That the Extra Cost to Tim of a Third