If You Were to Behave According to the Rational Choice

question 11

Multiple Choice

If you were to behave according to the rational choice model when confronted with a loss of $25 on the same day in which you receive an unexpected gift of $25 you would

• A)value the loss of $25 more heavily than the gift of $25.
• B)discount the loss and value the gain so that you feel you have gained welfare.
• C)see the two events as exactly offsetting and thereby of no consequence in your overall welfare.
• D)value the gift of $25 more than the loss of $25.

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Definitions:

Operant Conditioning

Operant Conditioning is a learning process through which the strength of a behavior is modified by reinforcement or punishment, a concept introduced by B.F. Skinner.

Neutral Stimulus

A stimulus that initially does not elicit any intrinsic response until it is associated with an unconditioned stimulus.

Salivation

The secretion of saliva in the mouth by the salivary glands, which is often a reflex response to the sight, smell, or taste of food.

Unconditioned Response

A natural, automatic reaction to a stimulus that occurs without any prior learning or conditioning, such as salivating in response to the smell of food.