Solve the Problem. -In a Survey of 159 Vacationers in a Popular Beach

question 4

Multiple Choice

Solve the problem.
-In a survey of 159 vacationers in a popular beach resort town, 62 indicated they would consider buying a home there, 52 would consider buying a beach villa, 46 would consider buying a lot, 21 would consider both a home
And a villa, 20 would consider both a home and a lot, 18 would consider both a villa and a lot, and 9 would
Consider all three. How many vacationers would not consider any of the three? How many would consider only
A home?

• A) 49; 17
• B) 49; 30
• C) 58; 42
• D) 49; 22

Recognize the impact of personal biases and systematic mistakes in decision making.

Identify the assumption of rational behavior in economic models.

Analyze how people weigh observational vs. statistical information in their choices.

Examine the various systematic mistakes commonly made in personal and economic decisions.

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Definitions:

Retention Ratio

The percentage of net income that is retained in the business rather than paid out as dividends; synonymous with Plowback Ratio.

Cash Dividends

Cash dividends refer to the distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders in the form of cash.

Selling and Administrative Expenses

Costs associated with the daily operations of a business that are not directly linked to producing the product or service but are necessary for selling and managing the business.

Plowback Ratio

A financial metric indicating the proportion of earnings a company decides to retain for reinvestment, rather than distributing as dividends.