Luke Won Tickets to See a Rock Music Concert

question 52

Multiple Choice

Luke won tickets to see a rock music concert.Even though Luke is a rhythm and blues fan,he goes to the concert anyway.Twenty minutes later,Luke decides he hates the music and the screaming fans,and he walks out an hour before the concert is scheduled to end.Luke's behavior demonstrates what economic concept?

• A) Irrational behavior
• B) Rational behavior
• C) The fungibility of money
• D) None of these explain Luke's behavior.

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Definitions:

Contra-Asset

A contra-asset account is a negative asset account that offsets the balance on the asset account with which it is paired.

Liability

Liability represents an entity's financial debt or obligations that arise during the course of operations, expected to be paid or settled in the future.

Bargain Purchase Option

An option in a lease that allows the lessee to purchase the leased asset at the end of the lease term at a price significantly lower than its estimated fair market value.

Capital Lease

A lease agreement that transfers substantially all the risks and benefits of ownership to the lessee, effectively treated as a purchase by the lessee.