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Homework answers / question archive / Discuss the impact of rational self-interest on each of the following decisions
Discuss the impact of rational self-interest on each of the following decisions.
a. Whether to attend college full time or enter the workforce full time
b. Whether to buy a new textbook or a used one
c. Whether to attend a local college or an out-of-town college
(Specialization) Provide some examples of specialized markets or retail outlets. What makes the Web so conducive to specialization?
Being rational implies making the best choice. In the first case, the individual will weigh the expected benefits with the costs of attending the college. The benefits will include the enhancement of knowledge which will increase the productivity of the individual. The cost will include tuition fees. Therefore if the benefits outweigh the cost, the individual?s rational decision will be to attend the college.
Similarly in the second case, the individual will weigh the cost and benefits of the new textbook, if the benefits received from the new textbook are in excess of the cost incurred on the new textbook, the individual?s rational choice will be to purchase a new textbook.
An individual will compare the expected benefits and costs associated with both the colleges The costs of attending an out of town college include greater travel costs and benefits will be learning about a new different region. The individual will choose the college at which the difference between benefits and costs is greater.
A specialized market or retail outlet involves specialization on a particular individual product without any deviation to other products.
The example of the specialized market is the stock exchange market which deals with the trading of the shares, the military where the trade of weapons is done under the sole guidance of the government or by the private bodies under the authorization given by the government.
The web is so conducive to specialization because it provides a platform for the business to advertise specialized products. Even the customers have a wide range of stores to choose the best product from the specialized outlets available on the web.