Which of the Following Best Characterizes Rational Self-Interest by an Individual

question 65

Multiple Choice

Which of the following best characterizes rational self-interest by an individual?  

• A) The use of some mathematical model when solving a problem is desirable. 
• B) Maximize expected benefits and minimize expected costs. 
• C) Only monetary costs and benefits are weighed. 
• D) Scarcity can be eliminated for that individual.

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Definitions:

Limited Funds

A condition where resources, especially money, are finite or restricted in availability.

Net Present Value

A valuation method that calculates the value of future cash flows in today's dollars by discounting them at a particular rate.

Internal Rate Of Return

The critical interest rate that nullifies the net present value of cumulative cash flows from a project.