Tabitha shares a flea market booth with her sister. Her share of the rent is $150 per month. She is considering moving to her own, larger booth which she will not have to share with anyone. The larger booth rents for $450 per month. Recently, you ran
into Tabitha in the grocery store and she tells you that she has rented the larger booth. Tabitha is as rational as any other person. As an economics major, you rightly conclude that
A) Tabitha did not have a choice; her sister was overcharging her.
B) Tabitha figures that the additional benefit of having her own booth (as opposed to sharing) is at least $300.
C) Tabitha figures that the additional benefit of having her own booth (as opposed to sharing) is at least $450.
D) the cost of having one's own booth outweighs the benefits.
Answer: B
You might also like to view...
Voting against ones preferences in the initial round of a runoff election in order to prevent the selection of an undesirable alternative in the final round is called
A) ballot manipulation. B) strategic voting. C) naive voting. D) the voting paradox.
The figure above shows the market for coffee If the government pays the coffee producers a subsidy and production increases to 30 million pounds per day, the deadweight loss is
A) zero. B) $7.5 million. C) $15 million. D) $10 million.