Logan Has $2,000 in a Checking Account and Wants to Buy

question 82

Multiple Choice

Logan has $2,000 in a checking account and wants to buy a new MacBook for $1,100. Logan decides he needs the money in his account to pay his bills next month, so he buys the MacBook by charging the $1,100 to his credit card and paying it off gradually over the next several months. Logan choosing to "save" his cash on hand for bills is:

• A)irrational, because money is fungible.
• B)rational, because Logan can now pay all his bills right away.
• C)irrational, even though it will make him wealthier in the long run.
• D)rational, because he now has both a new computer and money in the bank.

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Definitions:

Independent Variable

A variable presumed to influence or determine the dependent variable in an experiment or study.

Coefficient of Determination

A statistical measure that determines the proportion of variance in the dependent variable that can be predicted from the independent variable(s).

Quadratic Model

A statistical or mathematical model in which the relationship between the independent variable and the dependent variable is represented by a second-degree polynomial or parabolic function.

Quadratic Relationship

A type of relationship between two variables where the relationship can be described by a second-degree polynomial or equation.