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.