An individual will maximize his or her net benefit from an activity by engaging in it to the point where:
A) total benefit equals total cost.
B) marginal benefit equals total benefit.
C) total benefit exceeds total cost by the greatest amount.
D) marginal benefit exceeds marginal cost by the greatest amount.

Question

Quizplus · Accepted Answer

The principle of maximizing net benefit (the difference between total benefits and total costs) suggests that an individual will engage in an activity up to the point where the total benefit exceeds the total cost by the greatest amount. This is the point where net benefit is maximized.

An Individual Will Maximize His or Her Net Benefit from an Activity