A change in a marginal benefit or cost will
A)change incentives.
B)increase sunk costs.
C)decrease production.
D)increase consumption.
E)cause an individual to make a rational choice.

Question

Quizplus · Accepted Answer

A change in marginal benefit or cost alters the incentives an individual faces, which may lead to a change in behavior or decision-making. Thus, the best answer is A. B is incorrect because sunk costs are costs that have already been committed and cannot be recovered or changed. C and D are not necessarily true since a change in marginal benefit or cost could lead to an increase or decrease in production or consumption depending on the situation. E may be true, but it is not the best choice since not all individuals may make a rational choice in response to a change in marginal benefit or cost.

A Change in a Marginal Benefit or Cost Will