Which of the following would be an example of rational...

Which of the following would be an example of rational behavior? A Choosing a cheap, economical car instead of an expensive, fuel-inefficient car B Marrying the first woman you meet at a party C Throwing out all your clothes because someone said they didn't like the shirt you wore that day D Deciding to skydive after watching someone do it in a movie E Eating a 100 hot dogs on a dare

Transcript

00:01 We have six situations and we're to decide whether the person or people are showing rational or irrational behavior.

00:12 So in the first one, cookie's best friend gave her a gift card, but cookie forgets about the card and she's careful, though, with her cash.

00:23 So this would be a case of mental accounting where you value dollars in one form, in this case, cookies value.

00:30 When the dollars in cash that she's careful with more than the dollars in the gift card that she forgets about.

00:38 In 2010, panera bread opened a store in missouri, and instead of putting a price on the things that the food, they listed suggested donations based on the cost of the goods, and all the profits would go to a charitable foundation that panera sent up, is set up.

01:00 And they were pleased after a year that the campaign was such a success.

01:07 So panera customers were acting rationally.

01:11 And the kind of rational behavior that would lead somebody to pay maybe more than they had to would be concerns about fairness.

01:21 In part c, rick has two job offers.

01:26 And one will last only two years, but it's at a prestigious school.

01:31 And he'll make $35 ,000 a year.

01:36 He probably, after the two years is over, thinks he could find a new job in the area, but he's not sure.

01:44 The other job pays less $25 ,000 a year and is guaranteed for five years.

01:49 And after five years, he's evaluated for permanent teaching position.

01:54 And about 75 % of the teachers who started the school end up being hired...