A Child Would Normally Eat Candy for 20 Minutes of Each

question 24

Multiple Choice

A child would normally eat candy for 20 minutes of each hour and play pinball for 40 minutes.According to the minimum deviation model, if the child is required on average to play pinball for 50 minutes in order to eat candy for 20 minutes, the child will most likely distribute its behavior to

• A)play pinball for 50 minutes to gain access to 20 minutes of candy.
• B)play pinball for only 40 minutes for less than 20 minutes of candy.
• C)play pinball for between 40 and 50 minutes for less than 20 minutes of candy.
• D)play pinball for more than 50 minutes to get as much candy as possible.

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Definitions:

Discount Rate

The discount rate applied in the discounted cash flow method to calculate the current value of future cash flows.

Tax Rate

The rate at which a person or company is charged taxes by the state.

Depreciation

The accounting method of allocating the cost of a tangible asset over its useful lifespan.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or investment.