You will buy another pair of jeans only if:
A) the marginal benefit from the change exceeds the average benefit from the change.
B) there are no costs involved.
C) the change increases social welfare.
D) there is no uncertainty about the results of the change.
E) the expected marginal benefit exceeds the expected marginal cost.

Question

Quizplus · Accepted Answer

According to the principle of rational decision-making, we should only take an action if the expected marginal benefit exceeds the expected marginal cost. Therefore, we will buy another pair of jeans only if the expected marginal benefit (i.e., the additional utility we will derive from having another pair of jeans) exceeds the expected marginal cost (i.e., the price we will have to pay to buy another pair of jeans).

You Will Buy Another Pair of Jeans Only If