Question

In a cost-benefit approach, managers should spend resources if the ________.

A) marginal costs to the company exceed the marginal benefits
B) expected benefits to the company exceed the expected costs
C) marginal costs to the company equal the marginal benefits
D) expected benefits to the company equal the expected costs

Answer 1

Managers should spend resources if the expected benefits to the company exceed the expected costs.

Step-by-step explanation:

In a cost-benefit approach, managers should spend resources if the expected benefits to the company exceed the expected costs.

A cost-benefit analysis involves comparing the costs and benefits of a particular decision or action. Marginal analysis is used to determine if the additional or incremental costs of a particular action outweigh the benefits.

For example, if a company is considering whether to invest in a new piece of equipment, they would compare the expected benefits of increased productivity and efficiency with the expected costs of purchasing and maintaining the equipment. If the expected benefits outweigh the expected costs, it would make sense for the company to spend resources on the equipment.