Assuming Baker Makes the Change in the First Quarter of 2018

question 14

Multiple Choice

Assuming Baker makes the change in the first quarter of 2018, how much is reported as net income for the first quarter of 2018?

• A) $492,000.
• B) $494,800.
• C) $500,000.
• D) $505,200.
• E) $527,950.

---

Definitions:

Fully Rational

A term describing decision-makers who, with complete information, are able to consistently make choices that maximize their utility or profit.

Loss Aversion

A cognitive bias where the pain of losing is psychologically about twice as powerful as the pleasure of gaining.

Framing

In behavioral economics, the way in which choices are presented to consumers, affecting their decision-making and preferences.

Moral Persuasion

The act of convincing others to adopt certain behaviors or beliefs based on ethical or moral reasoning.