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:

Collection Period

The average number of days it takes for a business to receive payments owed by its customers, indicating the efficiency of a company's credit and collection policies.

Sales

The total amount of revenue generated by a company from the sale of goods or services before any costs or expenses are deducted.

Accounts Receivable Balance

The entire sum owed by customers to a company for the consumption of goods or services for which payment has not been made.

Cost of Goods Sold

The immediate expenses linked to the creation of products that a company sells.