Economics · Basic Economic Principles

Which economic principle best explains why people choose to invest in education or higher-paying career paths?

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1Educational choices are made only on an emotional basis.
2People react to incentives and invest whenever the marginal benefit exceeds the marginal cost.✓
3People will always select occupations with lower income, irrespective of returns.
4In rational decision-making, the cost of education is not high.

Correct answer

People react to incentives and invest whenever the marginal benefit exceeds the marginal cost.

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