Your Friend Spends Money Like Water

question 250

Multiple Choice

Your friend spends money like water.When you learn that he is from a poverty-stricken background,you attribute his spending patterns to his earlier deprivation.According to the critical thinking analysis,you are likely to do this because of

• A) the hindsight bias.
• B) a self-serving attribution.
• C) the consistency and distinctiveness of personality.
• D) circular reasoning.

---

Definitions:

Constant-Cost Industry

An industry in which the cost of production does not change as the industry's output changes.

Long-Run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied over a period long enough for firms to enter or exit the market.

Prices of Resources

The costs associated with acquiring the inputs needed for production, such as labor, raw materials, and capital.

Economic Profits

The variance between gross income and total costs, considering both explicit and implicit expenses.