To Make a Rational Choice, a Person

question 144

Multiple Choice

To make a rational choice, a person

• A)adds the total benefits to determine if the total is large enough.
• B)adds the total costs to determine if the total is small enough.
• C)compares the extra benefits of one more unit to the extra costs of one more unit.
• D)adds the total benefits and the total costs and then compares the two totals.
• E)takes account of all benefits and all opportunity costs, including both marginal costs and sunk costs.

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Definitions:

Labor Market

The supply and demand for labor, where employers seek to hire workers and workers seek employment, typically analyzed by wages, hours, and conditions.

Fairness

The characteristic of forming opinions that are unbiased and honest.

Unemployment

The situation when individuals who are capable of working and actively seeking employment cannot find a job.

Ultimatum Game

An economic experiment and game theory scenario where two players decide how to divide a sum of money between them.