John has a math test tomorrow. He has decided to go to the gym today and then study math for several hours. Which of the following statements is TRUE?
A) John did not use the economic way of thinking because his decision on how to allocate his time did not involve money.
B) John's decision on how to allocate his time is inconsistent with the rationality assumption since he has decided to go to the gym.
C) John's decision on how to allocate his time is consistent with the rationality assumption since the decision is intended to make him better off.
D) John's decision does not involve his pursuit of self-interest.

Question

Quizplus · Accepted Answer

Rationality assumption means that individuals make decisions that are intended to make them better off. In this case, John's decision to go to the gym and then study math is consistent with this assumption because he believes that exercising will make him feel better and more focused, which will ultimately help him perform better on the math test. It is not necessary for a decision to involve money in order to use the economic way of thinking. Additionally, pursuing self-interest does not necessarily mean being selfish - John's decision to study math shows that he is pursuing his long-term self-interest.

John Has a Math Test Tomorrow