Question: A rational decision maker decides on an option or policy change only if the marginal benefit exceeds the marginal cost. Such a decision maker, for
A rational decision maker decides on an option or policy change only if the marginal benefit exceeds the marginal cost. Such a decision maker, for example, can be the government deciding whether or not to lockdown the economy during the Pandemic in 2020. From the government's perspective, name and explain the main marginal benefit (MB) and marginal cost (MC) of the "Lockdown policy" during the Pandemic. (2 points) What are the specific real-world conditions or situations such that the government should not implement the lockdown policy? What can the government do to make the MB higher than MC? Explain your answer. (2 points)
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