The Rule of Rational Choice

question 88

Multiple Choice

The rule of rational choice:

• A)requires the availability of complete information before decisions can be made.
• B)can only be applied in business decisions.
• C)involves "marginal thinking."
• D)is the basis on which only greedy people make decisions.
• E)requires the availability of information on only the average benefits and costs of an activity.

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Definitions:

Accounts Payable

Short-term debts or obligations a company owes to its suppliers or creditors for goods and services received.

Sales Returns and Allowances

Deductions from a company's sales revenue that account for returned goods and discounts or allowances given to customers.

Purchase Discounts

Reductions in the purchase price of goods, services, or assets, usually offered as an incentive for prompt payment.

Sales Returns and Allowances

A reduction in sales revenue due to returned goods or allowances made for damaged or unsatisfactory products.