Which one is false? Explain why that is false.
1. The production possibilities curve is a simple device for summarizing the possible combinations of output that a society can produce if it employs its resources efficiently.
2. One person has a comparative advantage over another in the production of a good if she or he can produce more of that good than the other person.
3. The Cost-Benefit Principle says that a person should take an action if, and only if, the benefit of that action is at least as great as its cost.
4. Market equilibrium occurs when the quantity buyers demand at the market price is exactly the same as the quantity that sellers offer.
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The false statement is number 3: The Cost-Benefit Principle says that a person should take an action if, and only if, the benefit of that action is at least as great as its cost.
This statement is false because the Cost-Benefit Principle states that a person should take an action if the benefit is greater than or equal to the cost, not necessarily "at least as great as." In other words, as long as the benefits of an action outweigh the costs, it is considered rational to take that action.
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