Alan Is Sitting in a Bar Drinking Beers That Cost

question 65

Multiple Choice

Alan is sitting in a bar drinking beers that cost $1 each.According to the economic decision rule, Alan will quit drinking when the marginal:

• A)benefit to him of an additional beer is less than$1....
• B)cost to him of an additional beer is less than the marginal benefit.
• C)cost remains at$1....
• D)benefit to him of an additional beer is greater than$1....

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Definitions:

Technology

The application of scientific knowledge for practical purposes, especially in industry, which includes machinery, equipment, methods, and processes.

Cost-benefit Constraint

A principle that considers whether the cost of implementing a decision outweighs the benefits derived from it.

Disclosure

The process of making essential financial information known to shareholders, regulators, and the public.

Benefits

Various forms of value, such as health insurance and retirement plans, provided to employees in addition to their salaries.