According to the No Marginal Improvement Principle for Boundary Choices,if X* is a best choice,then:
A) if only a marginal increase in the activity level is possible, the MB ≤ MC at X*.
B) if only a marginal increase in the activity level is possible, the MB ≥ MC at X*.
C) if only a marginal decrease in the activity level is possible, the MB ≤ MC at X*.
D) MB = MC at X*.

Question

Quizplus · Accepted Answer

The No Marginal Improvement Principle states that if X* is a best choice, then at the margin, the marginal benefit (MB) should be less than or equal to the marginal cost (MC) for any marginal increase in the activity level.