Question

Rational economic decision makers will make a change only if: a. ​their expectations are correct. b. ​there are no costs involved. c. ​there is no uncertainty about the results of the change. d. ​the change is free of risk. e. ​the expected marginal benefit exceeds expected marginal cost.

Answer 1

e. the expected marginal benefit exceeds expected marginal cost

Step-by-step explanation:

Rational decision making refers to deciding in favor of those decisions which yield favorable results. The decision making process takes into account rational, unbiased objective thinking before opting for a course of action.

Marginal benefit refers to how much a consumer is willing to pay to consume an additional unit of output.

Marginal cost refers to the additional cost incurred when another unit of an output is produced.

A rational decision maker makes a change only in the scenario wherein, the marginal benefits derived from consuming a product exceed the marginal cost associated with the product.