Eric Tries to Eat More Healthfully by Eliminating Cookies, Donuts

question 172

Multiple Choice

Eric tries to eat more healthfully by eliminating cookies, donuts, and similar snacks from his diet. Every day at work, however, coworkers bring in these treats and Eric succumbs to temptation. Which of the following concepts would behavioral economists use to explain Eric's self-control problem?

• A)time inconsistency
• B)availability heuristic
• C)self-serving bias
• D)system 2 processes dominating decision making

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Definitions:

Temporary Difference

Refers to the differences that arise between the tax base of an asset or liability and its carrying amount in the financial statements, which will result in taxable or deductible amounts in future years.

Interest On Municipal Bonds

The periodic payments made to investors of municipal bonds, often exempt from federal and sometimes state and local taxes.

MACRS Depreciation

Modified Accelerated Cost Recovery System, a method of depreciation for tax purposes in the United States that allows a faster write-off of assets.

Product Warranty Expenses

Product warranty expenses are costs that a company anticipates and records for potential future claims on warranties provided for their products.