Mary goes ahead and buys a new car because she expects to receive a 10% increase in her salary next year.What type of behavior does this BEST represent?

Question

Quizplus · Accepted Answer

Mary's decision to buy a new car based on the expectation of a future salary increase suggests overconfidence. She is assuming that her salary will actually increase, which may not be a reliable assumption. Additionally, even if her salary does increase, she may have other financial obligations or unexpected expenses that she has not considered. This decision is not necessarily based on a careful consideration of opportunity costs or risk aversion.

Mary Goes Ahead and Buys a New Car Because She