Rational Ignorance Is the Decision NOT to

question 122

Multiple Choice

Rational ignorance is the decision NOT to

• A) vote in elections.
• B) acquire information because the marginal benefit of doing so exceeds the marginal cost.
• C) acquire information because the marginal cost of doing so exceeds the expected marginal benefit.
• D) acquire information because the marginal cost of doing so equals the expected marginal benefit.
• E) follow the principle of minimum differentiation.

---

Definitions:

Estimate

An approximation or educated guess regarding the value, quantity, or extent of something, often used for budgeting and planning processes.

High-Low Method

A way to estimate the fixed and variable components of a cost by analyzing the highest and lowest activity levels and their associated costs.

Fixed Cost

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and loan payments.

Machine Hours

A measure of the amount of time a machine is operated, used in cost accounting to allocate costs to products.