The Idea of Time Inconsistency

question 41

Multiple Choice

The idea of time inconsistency:

• A)explains how it can be rational for someone to say they're going to eat a salad for dinner each night this week and end up eating pizza four out of five nights instead.
• B)explains how it can be rational for someone to pay more for something on their credit card than if they were to pay cash for the same thing.
• C)explains why people refuse to ignore only some sunk costs,while think at the margin other times.
• D)Time inconsistency doesn't explain any of these behaviors.

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Definitions:

Goods Sold

Refers to the total number of units of product sold by a company during a specific period.

Production Budget

An estimation of the costs that will be incurred on the production of goods or services, often part of a broader budgeting process.

Finished Goods

Items that have gone through the production process but remain unsold and have not been dispatched to consumers.

Sales Estimate

An approximation of the number or value of goods or services that a company expects to sell in a future period.