If a person gives a gift to another person, an economist would say that it is because
A)the marginal benefit of giving the gift is at least as great as the marginal cost of giving the gift.
B)the marginal cost of giving the gift is at least as great as the marginal benefit of giving the gift.
C)he expects to receive a gift in return.
D)There is not enough information provided to answer the question.

Question

Quizplus · Accepted Answer

According to the rational choice theory in economics, people will take an action if the marginal benefit exceeds the marginal cost. In the case of gift-giving, the giver believes that the recipient will derive more happiness or satisfaction from receiving the gift than the giver will lose by giving it. Therefore, the marginal benefit of giving the gift is at least as great as the marginal cost of giving the gift.

If a Person Gives a Gift to Another Person, an Economist