Which of the Following Is an Example of a Rational

question 50

Multiple Choice

Which of the following is an example of a rational decision?

• A) Jim enjoys the feeling of wind in his hair enough to ride his motorcycle without a helmet, even though he fully realizes the potential for injury it creates by not wearing one in the unlikely event he is in an accident.
• B) Doris, a burglar who breaks into houses, decides to break into the house at 265 Elm Street, rather than the house next door because the house next door has a sign in the yard that says "home protected by a security system."
• C) Brandon, a drug user, chooses to buy his cocaine from Pablo, because Pablo's cocaine is as good as the cocaine from other dealers, but Pablo has lower prices.
• D) All of the above are examples of rational choices.

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Definitions:

Balance Sheet

The Balance Sheet is a financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time.

Marketable Securities

Financial instruments and assets that can easily be converted into cash without significant loss of value.

Investments

Investments refer to assets purchased with the intention of generating income or appreciation, including securities like stocks and bonds, real estate, or other vehicles.

FASB

Financial Accounting Standards Board, an independent organization responsible for establishing and improving financial accounting and reporting standards in the United States.