Which of the following scenarios describes an action that is not rational from an economic point of view?
A) After drinking one martini (shaken, not stirred), James buys and drinks a second martini even though the marginal benefit of the second martini is lower than the marginal benefit of the first.
B) Eric buys a replacement ticket to the basketball game after he realizes that he accidentally left his original ticket at home.
C) Emily chooses to attend a social event on Tuesday night instead of studying even though she has an important exam on Wednesday morning.
D) US Airways sells a last minute ticket to Don for $50 even though its average cost per passenger is $250.
E) None of the above

Question

Quizplus · Accepted Answer

Each scenario described involves individuals or entities making decisions based on their subjective valuation of benefits and costs at the moment, which can be rational from their perspective, even if it might not seem so from an outside view.

Which of the Following Scenarios Describes an Action That Is