ECONOMICS
COST BENEFIT ANALYSIS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
the benefits outweigh the costs.
|
|
|
the costs outweigh the benefits.
|
|
|
there are no costs.
|
|
|
there are no marginal costs.
|
Detailed explanation-1: -What does thinking like an economist mean? At its most basic, thinking like an economist means evaluating the facts without allowing opinion or logical fallacies to enter into the calculation.
Detailed explanation-2: -When the marginal cost exceeds the marginal benefit, they are better off doing less of it. Past costs are called “sunk” costs. The sunk cost fallacy occurs when people fail to recognize that the relevant costs and benefits occur at the margin, which necessarily involves future costs and benefits.
Detailed explanation-3: -Answer and Explanation: The given statement is true. Explanation: When two people decide to engage in economic activity, they will make an exchange only if there is more economic benefit than economic cost, so that the transaction will be beneficial for them or for society.
Detailed explanation-4: -What Is a Cost-Benefit Analysis? A cost-benefit analysis is a systematic process that businesses use to analyze which decisions to make and which to forgo. The cost-benefit analyst sums the potential rewards expected from a situation or action and then subtracts the total costs associated with taking that action.