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:

Depreciation Expense

Depreciation expense is the allocated amount of the cost of a tangible or physical asset that is expensed over its useful life, reflecting wear and tear or obsolescence.

Gain On Sale

The profit realized when an asset is sold for more than its book value.

Indirect Method

A way of presenting the cash flow statement that adjusts net income for changes in balance sheet accounts to calculate cash flow from operating activities.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life.