Bill and Ted are roommates at the local university, and both are of voting age.
ID: 1115991 • Letter: B
Question
Bill and Ted are roommates at the local university, and both are of voting age. Ted asks Bill if he will be voting in tomorrow's state elections. Bill responds no because he is not up to date on the current issues, and doesn't have the time to read up on them. Which of the following best characterizes Bill's situation? Assume Bill is a utility maximizer Bill's expected marginal benefit of gathering information is greater than his expected marginal cost his expected marginal benefit. Bill's expected marginal cost of gathering information is greater Bi's expected marginal cost of gathering information is equal to than his expected marginal benefit. Which of the following theories describes the situaiton above? Rational lgnorance Irrational Exuberance. O Irrational Rationality. O Rational Expectations.Explanation / Answer
1) ans is C. Bills marginal cost of gathering information will be more than expected benelfit
2) ans is A. Rational ignorance is refraining from acquiring knowledge when the cost of educating oneself on an issue exceeds the potential benefit that the knowledge would provide.
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