Final answer:
Economic decisions vary due to subjective evaluations of costs and benefits, influenced by marginal utility theory, expectations, and preferences.
Explanation:
Costs and benefits are subjective. Economic decisions vary from person to person even under the same circumstances because individuals have different subjective evaluations of costs and benefits. Each person assesses the utility they derive from a decision differently, leading to varied choices.
Marginal utility theory plays a significant role in understanding these differences. As individuals consume more of a good or service, the additional utility derived diminishes, impacting their decision-making process.
Furthermore, expectations and preferences also differ among people, influencing their economic decisions based on their unique perspectives and goals.
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