Keith McPherson Earned $20,000 Last Year as a Carpenter

question 138

Multiple Choice

Keith McPherson earned $20,000 last year as a carpenter. He paid $6,000 for food, rent, medical expenses and other "necessities." There was little construction work in February, so he took a trip to the Caribbean and spent $4,000. What was Keith's discretionary income last year?

• A) $4,000
• B) $20,000
• C) $10,000
• D) $12,000
• E) There is not enough information to determine Keith's discretionary income.

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Definitions:

Behaviors

The actions or reactions of individuals or groups in response to external or internal stimuli.

Social Learning

A theory that suggests people learn new behaviors and acquire new information by observing and mimicking others, as well as through direct instruction.

Cognitive Dissonance

The mental discomfort experienced by a person who holds two or more contradictory beliefs, ideas, or values at the same time, leading to an alteration in one of the attitudes, beliefs, or behaviors to reduce the discomfort and restore balance.

Competitive Inertia

A situation where a company continues with its current strategies because it has historically been successful, even when those strategies become less effective.