If people follow the rule of rational choice they will choose options that they think will:
a. create more average benefits than average costs
b. create more additional costs than additional benefits
c. create equivalent additional benefits and additional costs
d. create more additional benefits than additional costs
d
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Another term for an economic variable whose value is given is ________
A) endogenous B) exogenous C) autonomous D) ornamental
Return to the case of Jan, the hyperbolic discounter from the previous question. Suppose she can sign a contract that requires her to give up money equivalent to a loss of X utils if she does not undertake the action. Assume she does not behave consistent with her plans without this contract. How high would the contractual value of X have to be to prevent her inconsistency?
a. C – B/2. b. B. c. C. d. B + C.