Final answer:
The statement is true; majority rule can indeed fail to produce a single preferred outcome when there are more than two choices due to the potential for cyclic preferences, which is known as the Condorcet paradox. In decision-making processes like weekend plans or tariff policies, costs and benefits are weighed to ascertain the most favorable outcome.
Step-by-step explanation:
The statement that majority rule can fail to produce a single preferred outcome when there are more than two choices is true. This situation is known as a Condorcet paradox or voting paradox, where collective preferences can be cyclic and may not result in a clear winner even if individual preferences are clear. This is especially evident when each choice receives some support, but none are the majority preference when compared against all others individually. An example of this would be if three friends were deciding where to go on a weekend getaway, and they each had different first, second, and third choice preferences. It could result in a scenario where there is no single activity that gets the most votes when compared pairwise with the other activities, making it difficult to reach a decision on the activity that provides the highest level of utility to the group. When making decisions, a cost/benefit analysis is often applied. This involves weighing the marginal costs against the marginal benefits to determine the option that yields the highest net benefit or utility. This analytical approach can assist in making a rational choice by comparing what is sacrificed against what is gained from a decision.