Final answer:
Calculations of cost and benefit are subjective and can be described as varying from one person to another, due to personal values, preferences, and circumstances. The decision-making process involves weighing marginal costs against marginal benefits, considering not just monetary costs but also time and effort.
Step-by-step explanation:
Because calculations of cost and benefit are subjective, they can be described by the fact that they vary from one person to another. This variance occurs because each person has different values, preferences, and circumstances that impact their view on what constitutes a cost or a benefit. An individual's decision-making process involves comparing the marginal costs against the marginal benefits. That is, they weigh the extra cost of adding an additional unit against the extra benefit derived from that same unit.
Furthermore, not all costs are purely monetary. The use of resources, including time and effort, to achieve some benefit is also considered a cost. Therefore, in a cost-benefit analysis, one balances the costs, which include money, effort, and other sacrifices, against the benefits, such as gains in money, time, experience, and other improvements.
Ultimately, a rational individual will choose an action if the perceived benefits exceed the perceived costs. This subjective evaluation means that what is a beneficial decision for one individual may not be the same for another, due to the personal nature of costs and benefits.