If relevant information can be obtained at no cost, people are ________ when they fail to use all available information given that there are usually ________ to making a wrong forecast.
A) behaving rationally; costs
B) behaving rationally; no costs
C) not behaving rationally; costs
D) not behaving rationally; no costs

Question

Quizplus · Accepted Answer

This statement suggests that people have access to relevant information at no cost, yet fail to use it to make accurate forecasts. Therefore, it is not rational for people to not use all available information, even though there may be costs associated with acquiring and processing additional information. Hence, the correct choice is (C) not behaving rationally; costs.

If Relevant Information Can Be Obtained at No Cost, People