The Assumption That Individuals Act Rationally Implies That

question 107

Multiple Choice

The assumption that individuals act rationally implies that

• A)people think only of themselves and disregard the well-being of others
• B)people undertake all those activities that yield benefits to themselves
• C)people only consider the costs of an activity to decide whether it is worthwhile
• D)the greater the cost of a charitable deed to a benefactor, the more likely he or she is to perform that deed
• E)people implicitly calculate the costs and benefits of an activity to decide if it is worthwhile

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Definitions:

Material Purchases

The total cost of raw materials acquired for use in the production process.

Est. Cost of Goods Sold

An estimated figure representing the cost directly associated with the production of the goods sold by a company.

Selling Price

The amount of money a seller charges for a product or service.

Credit Sales

Transactions where goods or services are sold and payment is delayed, typically recorded as accounts receivable.