When an Individual Weighs Her Options and Makes a Choice

question 37

Multiple Choice

When an individual weighs her options and makes a choice that maximizes her benefit at the minimum cost, economists refer to this as a process of

• A) rational decision making.
• B) objective decision making because the value of goods is determined objectively.
• C) marginal management analysis.
• D) random decision making.

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Definitions:

Sell

To sell is to exchange a product, service, or asset for money or to dispose of it into the market.

Spot Price

The current market price at which a particular asset, like a commodity, currency, or security, can be bought or sold for immediate delivery.

Futures Price

The agreed-upon price for a financial instrument or commodity to be sold or bought at a future date, used primarily in futures contracts trading.

Convergence Property

The characteristic of a mathematical series or economic model to approach a limit or a stable point over time.