Leonard Is Missing a Sock

question 58

Multiple Choice

Leonard is missing a sock.His sister suggests that a friend of his may have snuck into his room while he was sleeping and taken the sock as a practical joke;however,Leonard decides it is much more likely that the sock was simply lost when he last did the laundry.What element of critical thinking most likely influenced his decision?

• A)skepticism
• B)the principle of parsimony
• C)tolerance of ambiguity
• D)avoiding overly emotional thinking

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Definitions:

Implicit Cost

The opportunity cost equal to what a firm must give up in order to use resources it already owns, not directly involving monetary payment.

Marginal Analysis

The study of marginal decisions.

Marginal Cost

The additional cost incurred in producing one more unit of a good or service, crucial for decision-making about production levels.

Learning Effects

These are reductions in production costs that occur due to learning and improving over time, as processes become more efficient with experience.