Jose has one evening in which to prepare for two exams and can employ one of two possible strategies: Strategy Score in Economics Score in Statistics A 94 79 B 77 90 The opportunity cost of receiving a 90 on the statistics exam is points on the economics exam.

17 points

Explanation:

The Opportunity cost in this case is the amount of points that Jose has to forgo for picking one alternative.

If Joe had picked strategy B which would give Jose 90 points on statistics then that means that Jose would not have picked strategy A which gave a 94 in Economics.

Therefore instead of getting a 94, Jose would get a 77. The opportunity cost is therefore;

= 94 - 77

= 17 points

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

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