Marcus Gets a New Cell Phone for Graduation

question 80

Multiple Choice

Marcus gets a new cell phone for graduation.He abandons his old phone in a drawer forever,even though he could sell it on Craigslist for $50.Marcus's behavior is

• A) irrational,because he wouldn't pay $50 for his old phone today,and still gives it up.
• B) rational,because he wouldn't pay $50 for his old phone today,and still gives it up.
• C) irrational,because the value of his new phone is $300 and should be compared to the $50 value of the old phone.
• D) rational,because the value of his new phone is $300 and should be compared to the $50 value of the old phone.
• E) neither rational nor irrational,since Marcus didn't buy the new phone.

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Definitions:

Owner's Right

The legal entitlements and privileges that come with owning an asset or property, including the right to use, rent, or sell it.

Financial Risk

The possibility of losing money on investments or business operations due to market fluctuations, interest rates, or credit issues.

Futures Contracts

Contracts that legally bind parties to purchase or sell a specific commodity or financial instrument for a set price on a future date.

Marked To The Market

Refers to the daily settling of gains and losses due to changes in the market value of a security, particularly relevant for futures contracts.