Which of the Following Is Most Consistent with Economizing Behavior

question 58

Multiple Choice

Which of the following is most consistent with economizing behavior?

• A) If you get the same satisfaction from a hamburger and a fish sandwich, you should purchase the one that costs the most.
• B) Even if you know how to paint, hiring someone to do the job is consistent with economizing behavior, if your opportunity cost is high enough.
• C) If the government provides a good free to citizens, the opportunity cost of the good is zero.
• D) If you get the same satisfaction from going to the opera and going to an art museum, it makes no difference which you choose.

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Definitions:

Coupon Rate

The annual interest rate paid by bond issuers to its bondholders, usually expressed as a percentage of the bond's face value.

Semi-Annually

Occurring twice a year, typically every six months.

Face Value

The nominal or dollar value printed on a security or bond, representing the amount that will be paid back at maturity, not including interest.