When Most Economists Wake Up in the Morning,their First Decision

question 66

Multiple Choice

When most economists wake up in the morning,their first decision is whether to hit the snooze bar on the alarm clock.What statement best represents their thought process as rational decision makers?

• A) Sal had a really late night grading exams,and he deserves 10 more minutes of sleep.
• B) The total amount of work Sal has to do today is rather small,so the total benefit to going to work for a full eight hours is also small.
• C) The total amount of work Sal has to do today is rather small,so the marginal cost of going to work 10 minutes late is small.
• D) The total amount of work Sal has to do today is rather small,so the marginal benefit of sleeping 10 more minutes is rather large.
• E) The marginal benefit of sleeping 10 more minutes is greater than the marginal benefit of 10 more minutes of work.

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Definitions:

Dependent Variable

A variable in statistical modeling, analysis, or experimentation that is influenced by other variables, commonly known as independent variables.

Normally Distributed

A probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Error Term

The part of an observation in regression analysis that is not explained by the model, representing the discrepancy between observed and predicted values.

Variance

A measure of the dispersion, indicating how spread out the data points are from the mean.