According to the cost-benefit principle if a change generates $50,000 in gains and $45,000 in losses, a. it is desirable. b. it is a pareto improvement. c. the gain is not large enough to justify the change. d. the desirability depends on who gains and who loses.

Option (A) is correct.

Explanation:

Given that,

Change generates:

Gains =  $50,000

Losses = $45,000

According to the cost-benefit principle, if the benefit-cost ration is greater than 1 then it is desirable.

Benefit-cost ratio =

                             =

                             = 1.11

Therefore, the benefit-cost ratio is greater than 1, so the change is desirable.

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answer; comparing the additional benefits and costs;