We Want to Understand Why People Behave as They Do

question 43

Essay

We want to understand why people behave as they do.One method we use is to draw inferences about their reasons.Attribution is the set of thought processes we use to assign causes to our own behavior and that of others.Define internal attribution and external attribution.Describe the three types of information that Harold Kelley proposed we rely on when deciding whether to make an internal or external attribution for behavior.

Evaluate the importance of self-confidence and its effects on decision making.

Understand the concept and graphical representation of a budget constraint and how income changes affect it.

Grasp the meaning and implications of the slope of the budget constraint.

Comprehend the properties and graphical characteristics of indifference curves.

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Definitions:

Net Pay

Gross earnings less payroll deductions.

Warranty Cost

Expenses incurred by a company to repair, replace, or refund products that are found to be defective after purchase.

Expense Recognition Principle

An accounting concept that expenses should be recognized in the period when the revenues generated by such expenses are recognized.

Payroll Tax Expense

Payroll tax expense refers to the taxes that employers are required to pay on behalf of their employees, such as Social Security and Medicare taxes in the United States.