The principle that individuals and firms pick the activity level where the incremental benefit of that activity equals the incremental cost of that activity is known as the:
A) principle of opportunity cost.
B) spillover principle.
C) marginal principle.
D) principle of diminishing returns.

Question

Quizplus · Accepted Answer

The principle described in the question is the marginal principle, which states that individuals and firms will continue to engage in an activity until the marginal benefit equals the marginal cost. This is a key concept in economics and decision-making, as it helps individuals and firms maximize their overall utility and profitability. The other options listed, such as the principle of opportunity cost and principle of diminishing returns, are also important economic principles, but they are not directly related to the concept described in the question.

The Principle That Individuals and Firms Pick the Activity Level