12) Which of the following scenarios describes an action that is NOT rational from an economic point of view?
A) After drinking one martini, 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
Answer
Option E
E) None of the above
The marginal benefit from the next unit decreases but the consumption goes on up to full satisfaction.
Eric wanted to watch the game and brought the replacement ticket is rational.
Emily choose to go to a social event is her rational choice
The last ticket has no marginal cost so the ticket selling below ATC is not the concern, profit is maximum at MR=MC and MC=0 for the passenger at last minute.
12) Which of the following scenarios describes an action that is NOT rational from an economic point of view? A) &...