One Reason That Consumers and Businesses Might Not Act Rationally

question 142

Multiple Choice

One reason that consumers and businesses might not act rationally is

• A) it is difficult to obtain enough information about the elasticities of demand and supply.
• B) they may not realise their actions are inconsistent with their goals.
• C) consumer tastes change constantly.
• D) they do not always value fairness when they make choices.

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Definitions:

Sales

The exchange of goods or services for money, representing the primary revenue source for most businesses.

COGS

Stands for Cost of Goods Sold; it's the direct cost attributable to the production of the goods sold by a company, including both raw materials and labor costs.

Compensating Balance

A minimum bank account balance a borrower must maintain as part of a loan agreement.

Effective Annual Interest Rate

The real return on a savings account or any interest-bearing investment, taking into account the effect of compounding interest.