Making an economically rational decision requires:

• A. selecting the alternative with the lowest opportunity cost regardless of benefits
• B. comparing the marginal benefit to the marginal cost of an action
• C. maximizing total output without considering additional costs
• D. choosing the option with the highest total cost

Answer: (B)

Verified step by step guidance

1. Understand the concept of economic rationality: it involves making decisions that maximize net benefits, not just minimizing costs or maximizing outputs without considering costs.
2. Recall that the key principle in economic decision-making is to compare the additional (marginal) benefit of an action to its additional (marginal) cost.
3. Recognize that an economically rational decision is made when the marginal benefit of an action is greater than or equal to its marginal cost, ensuring that the action adds value.
4. Eliminate options that focus solely on opportunity cost without considering benefits, or that maximize output without accounting for costs, as these do not fully capture rational decision-making.
5. Conclude that the correct approach is to compare marginal benefit to marginal cost, as this balances both benefits and costs to guide optimal decisions.