Melissa is a self-employed lawyer who chooses a higher-priced restaurant 2 miles from home over a cheaper restaurant 15 miles from home. Which of the following is the most likely explanation for her behavior?
a. The opportunity cost of her time is very low.
b. She doesn't take travel time into consideration.
c. She doesn't like to cook or doesn't know how.
d. The prices at the more expensive restaurant understate the opportunity cost of eating there.
e. The higher monetary cost of the more expensive restaurant is offset by the higher opportunity cost of the lower-priced restaurant.
E
You might also like to view...
If the federal funds rate is set by the Taylor rule and the output gap increases by 5 percentage points, everything else remaining unchanged, the federal funds rate should ________
A) decrease by 2.5 percentage points B) decrease by 5 percentage points C) increase by 5 percentage point D) increase by 2.5 percentage points
Typically, the more time suppliers have to adjust to changing market conditions,
A) the more elastic the supply curve. B) the more elastic the demand curve. C) the less elastic the supply curve. D) the less elastic the demand curve.
If a monopolist had no costs, its best possible price would be where demand is
A. relatively (but not completely) inelastic. B. unit elastic. C. infinitely elastic. D. relatively (but not perfectly) elastic.
The lemons model is used to analyze:
A. markets with asymmetric information. B. the market for citrus fruit. C. the Low-Hanging-Fruit Principle. D. markets in which search is costly.