Despite the warning on a package of cigarettes about the potential health hazards of smoking, a man lights up a cigarette.An economist would conclude that:

Question

Quizplus · Accepted Answer

Despite the warning on the package, the man has made a decision to light up a cigarette, which means that in his judgment, the expected marginal benefit of smoking the cigarette outweighs the expected marginal cost. It does not necessarily mean he is behaving irrationally, unconcerned about his future health, or that smoking should be banned by the government.

Despite the Warning on a Package of Cigarettes About the Potential