The Cost-Benefit Principle:

a. fully captures how people choose between alternatives.
b. provides an abstract model of how people should choose between alternatives.
c. describes how people behave once they have enough education.
d. provides little insight into how people actually chose between alternatives.

Defining cost-profit seems to be an assessment of the benefits and drawbacks of a given circumstance or course of treatment to decide whether downsides correlate with advantages. Continues to hold that somehow the expense of conveying information to consumers through financial reporting must not be greater than its value.

The theory of cost-benefit provides a conceptual framework of how individuals can select among substitutes.
The theory notes that intervention should only be performed if the advantages outweigh the costs.

PhantomWisdom PhantomWisdom · Answer 2 · 2022-03-26T04:17:06+01:00

The Cost-Benefit Principle is a model that explains how people should choose between options.

So, option b. is correct.

Define Cost-Benefit Principle.

According to the cost-benefit concept, the cost of supplying financial statement information should not outweigh its utility to readers. The main point is that some financial data is prohibitively expensive to produce.

The Cost-Benefit Principle is a model that explains how people should choose between options.

Therefore, option b. is correct.

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