Pat Has Just Graduated from College and Has Two Job

question 125

Multiple Choice

Pat has just graduated from college and has two job offers.One pays $45,000 and requires that Pat supervise employees doing construction work on a busy highway.The other is an office job that pays $40,000.Chris has received the same offers from the same firms.Pat values the added safety of the office job at $6,000 per year and Chris values the added safety of the office job at $3,000 per year.
Pat is more ____ than Chris.

• A)risk averse
• B)vulnerable to adverse selection
• C)careful
• D)rational

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Definitions:

Average Cost

A method for inventory valuation that calculates the cost of goods sold and ending inventory based on the average cost of all items purchased.

Retail Inventory Method

An accounting process used by retailers to estimate inventory value by converting the retail value of inventory to a cost basis, based on the relationship between cost and retail price.

Ending Inventory

The value of goods available for sale at the end of an accounting period.

Gross Profit Method

A method of estimating the amount of ending inventory by applying the gross profit percentage to sales.