John Has an Economics Test Tomorrow

question 138

Multiple Choice

John has an economics test tomorrow. He must study and has planned the rest of his day so that he can fit some study time in. He has decided to go to the gym and then study for several hours. Which of the following statements is TRUE?

• A)John did not use the economic way of thinking because his decision on how to allocate his time did not involve money.
• B)John's decision on how to allocate his time is inconsistent with the rationality assumption since he has decided to go to the gym.
• C)John's decision on how to allocate his time is consistent with the rationality assumption since the decision is intended to make him better off.
• D)John's decision does not involve his pursuit of self-interest.

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Definitions:

Variable Costs

Costs that change in proportion to the level of production or sales activities, such as materials and labor.

Utilization

The extent to which a resource, such as equipment or labor, is used for its intended purpose, often expressed as a percentage.

Efficiency

The ratio of the useful output to the total input in any system, reflecting how well resources are utilized without waste.