John Has an Economics Test Tomorrow

question 39

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:

Salvage Value

The estimated resale value of an asset at the end of its useful life, considered in depreciation calculations.

Depreciation

The planned apportionment of a tangible asset's cost over the time it is useful.

Salvage Value

The estimated resale value of an asset at the end of its useful life, important for depreciation calculations.

Market Value

Market value is the current price at which an asset or service can be bought or sold in a marketplace, often influenced by supply and demand dynamics.