Question

the cost - benefit principle indicates that an action should be taken
if the total benefits exceed the total costs.
based on flipping a coin or speaking with a psychic.
if the average benefits exceed the average costs.
if the net benefit (benefit minus cost) is zero.
if the extra benefit is greater than or equal to the extra costs.

Explanation:

The cost - benefit principle in economics (a subfield of Business) states that an action should be taken when the extra (marginal) benefit is at least equal to the extra (marginal) cost. Let's analyze each option:

• Option 1: Total benefits exceeding total costs is not the core of the cost - benefit principle as it's about marginal (extra) analysis.
• Option 2: Flipping a coin or consulting a psychic has nothing to do with the cost - benefit principle.
• Option 3: The cost - benefit principle is about marginal (extra) benefits and costs, not average.
• Option 4: A net benefit of zero means no gain, so action is not justified.
• Option 5: This is the correct interpretation of the cost - benefit principle, focusing on marginal (extra) benefits and costs.

Answer:

if the extra benefit is greater than or equal to the extra costs.