Mario Knows That, Over the Long Run, It Is in His

question 111

Multiple Choice

Mario knows that, over the long run, it is in his best interest to save at least 10% of his paycheck for retirement. However, each time he receives his weekly paycheck of $1,000, he ends up spending it all and not depositing any to a retirement account. Mario has resolved to contact his employer's human resources department to set up a 401(k) work-sponsored retirement account where the 10% would be deducted automatically from his paycheck before it is issued to him each week. It is apparent from this information that Mario realized that:

• A) his intertemporal decisions are inconsistent and he had to take action to make them consistent.
• B) his intertemporal decisions are consistent and he had to take action to make them inconsistent.
• C) it is better for him to handle sending money to a retirement account than to rely on his employer to send the money to a retirement account on his behalf.
• D) he should not be saving for retirement after all because his short-run preferences to spend his entire paycheck are perfectly indicative of his long-run preferences.
• E) he should not worry about the future anymore because it will take care of itself.

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Definitions:

Marketing Research

The process of gathering, analyzing, and interpreting information about a market, including products, services, and consumers.

Escalation Of Commitment

A behavioral pattern where individuals continue to invest in a decision despite new evidence suggesting it may be wrong, often due to sunk costs.

Business's Weaknesses

Refers to the internal factors and characteristics of a business that limit its effectiveness and ability to compete.

Misleading Information

False or inaccurate information that is presented in a way that deceives or misguides the audience.