In "thinking like an economist," the section "the role of economic theory" states that many economists believe that useful insights into our behavior can be gained by assuming that we act as if governed by the rules of rational decision-making.
It is possible to define rational decision-making as a decision-making process that incorporates reasoning at every stage. It is founded on the use of impartial knowledge. The first step in making a reasonable decision is to identify the issue that needs to be resolved, followed by the collection of all relevant data.
The next step is to examine every outcome that might result from each potential solution. The decision-making process that follows comprises weighing all viable options and selecting the best one based on reasoning.
Rational decision-making examples include:
● A student chooses what to study in his post-secondary education.
● A commercial choice regarding what to buy for the company.
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I would invest in building my own house. This is appealing to me because I want to raise a family in a nice house that I have built.
Answer: c. Marginal Cost
Explanation:
A Competitive firm operates in a market where they are price takers. This means that the price they charge is equal to both their average revenue and their Marginal Revenue.
P = MR = AR
Companies maximise profit at a point where Marginal Revenue equals Marginal Cost because at this point, resources are being fully utilized.
If the Competitive firm's Price is the same as its Marginal Revenue this means that to maximise profits, the firm should choose an output level where the price is equal to the marginal cost.
Answer: The attendant’s expected earn- ings for the period between 4:00 P.M and 5:00 P.M is <u>$12,67.</u>
Explanation: <u>The discrete random variable X</u> represent attendant’s earnings.
The expected value of the discrete random variable X is
<h2>
= E (x) = ∑× f(x)</h2><h2>= 7 × 1/12 + 9 × 1/12 + 11 × 1/4 + 13 × 1/4 + 15 × 1/6 + 17 × 1/6 = <u>12,67.</u></h2><h2><u /></h2>
Answer:
Q= 5714 pizzas
Explanation:
Giving the following information:
Your research shows that:
Pizza oven= $10,000.
Making the pizza= $5.00 per pizza.
To buy freshly made pizzas costs $6.75 each.
Q= (Fixed cost 1 - Fixed cost 2)/ (variable cost 2 - variable cost 1)
Q=(10000-0)/(6.75 - 5)
Q= 5714