Economists Assume That Rational Behaviour Is Useful in Explaining Choices

question 86

Multiple Choice

Economists assume that rational behaviour is useful in explaining choices people make:

• A)because irrational people do not make economic choices.
• B)even though people may not behave rationally all the time.
• C)because individuals act rationally all the time in all circumstances.
• D)even though people rarely, if ever, behave in a rational manner.

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Definitions:

Direct Labor Cost

The total cost of all labor hours that are directly involved in the production of goods or the provision of services.

Manufacturing Costs

Expenses directly involved in the production of goods, including direct labor, materials, and manufacturing overhead.

Delivery Expenses

Costs incurred by a company to deliver goods to a customer, including transportation and handling charges.

Raw Material

Basic materials that are used in the production process to manufacture finished goods.