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Business Economics Principles Of Microeconomics

The correct option if T is rational and has strong willpower to drive across town to save $10 on the price of a $20 clock radio. Introduction: An economic idea known as the rational consumer assumes that customers would always prioritize maximizing their personal gains while they make decisions. When making decisions, rational consumers go with the choice that will provide them with the maximum utility and satisfaction. From the available options, the correct option is T thinks that the trip's opportunity cost would not exceed $10. In this case, the only opportunity cost T incurs is the time it takes to drive across town. This indicates that he will only drive across town if the opportunity cost is equal to or less than the money he saved. The primary motivation for all rational decision-making is self-interest and here, T prefers a $20 clock radio. It means he would not drive to save money on a television set at any price. Therefore, the options b, c, and d would incorrect. Moreover, T is a rational decision-maker and thus he would choose a course of action that would maximize his utility. Any option from b to d would not maximize his utility to save $10 on the purchase price of a $20 clock radio. It means not more than one option will be correct. Therefore, the correct option is (a) and all other options (b, c, d, and e) are incorrect as T will only drive if the opportunity cost of the trip would not exceed $10 on the purchase of a clock radio.

The correct option if T is rational and has strong willpower to drive across town to save $10 on the price of a $20 clock radio. Introduction: An economic idea known as the rational consumer assumes that customers would always prioritize maximizing their personal gains while they make decisions. When making decisions, rational consumers go with the choice that will provide them with the maximum utility and satisfaction. From the available options, the correct option is T thinks that the trip's opportunity cost would not exceed $10. In this case, the only opportunity cost T incurs is the time it takes to drive across town. This indicates that he will only drive across town if the opportunity cost is equal to or less than the money he saved. The primary motivation for all rational decision-making is self-interest and here, T prefers a $20 clock radio. It means he would not drive to save money on a television set at any price. Therefore, the options b, c, and d would incorrect. Moreover, T is a rational decision-maker and thus he would choose a course of action that would maximize his utility. Any option from b to d would not maximize his utility to save $10 on the purchase price of a $20 clock radio. It means not more than one option will be correct. Therefore, the correct option is (a) and all other options (b, c, d, and e) are incorrect as T will only drive if the opportunity cost of the trip would not exceed $10 on the purchase of a clock radio.

Principles Of Microeconomics

Principles Of Microeconomics

7th Edition

ISBN: 9781260111088

Author: Robert H. Frank, Ben Bernanke, Kate Antonovics, Ori Heffetz

Publisher: McGraw-Hill Education

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Chapter 10, Problem 6P

Chapter 10, Problem 8P

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Marie has a weekly budget of $24. Pie's are $12 each. Magazines are $4 each. What is Marie's opportunity cost of purchasing a pie?

Marie has a weekly budget of $24, which she likes to spend on magazines and pies. What is Marie’s opportunity cost of purchasing a pie?

Economics is concerned with A. All the given answers B. the effects of changes in opurtunity cost on decisions C. the competition that scarcity makes necessary D. the choices people must make because resources are scarce

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Principles Of Microeconomics

Ch. 10 - Prob. 7P

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