Name: Bailey Mitchell
Journal: You Make the Call
Answer the following questions based on what you have learned about rational decision-making.
1. Give an example of an expensive product you would like to buy. How can you justify the purchase? How should you prepare financially once you have decided to make the purchase?
I would like to buy a car. I can justify this purchase because I need a car for transportation to my job every day, and it is something I have wanted for a really long time. To financially prepare once I have decided to make the purchase I should start saving most of my pay checks instead of buying things I do not need. I should save my money so I can pay off all or most of my car payment at once.
2. What aspects of your decision-making process fit the description of a rational choice? Did you consider costs and benefits? Did you pay attention to both monetary and non-monetary factors? Did you consider opportunity costs? Explain.
Most aspects of my decision making process fit the description of a rational choice, I considered both the costs and benefits. The costs being it is really expensive to own a car and then you have to continually put gas in it and worry about how much it costs if it breaks down. The benefits on the other hand are, not having to rely on other people to take me places and having more freedom than I do now. I did indeed pay attention to non-monetary and monetary factors. Although I do not think I paid nearly enough attention to considering opportunity costs, but I think I did a bit when I talked about paying for gas and having freedom, which when you have freedom you have to have gas.
3. What information did you have to help make this a well-informed decision? Was there some information that is important to have before making the purchase?
The information I had to help make this a...
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