If You Wanted to Buy a McDonald's Big Mac,small Fries,and

question 67

Multiple Choice

If you wanted to buy a McDonald's Big Mac,small fries,and a small drink separately,it will you cost you $6.19.However,if you purchased these three items together as part of the firm's Extra Value Meal package,you would pay only $4.39,savings 80¢.This "Extra Value Meal" price serves as __________ to you and other consumers,who compare the costs and benefits of substitute items to a bundle containing those items.

• A)a marginal analysis
• B)a profit equation
• C)a reference value
• D)a break-even analysis
• E)price elasticity of demand

---

Definitions:

Excise Tax

Excise Tax is a specific tax levied on particular goods, services, or transactions, often included in the price of products like gasoline, tobacco, and alcohol.

Income Elasticity

A gauge of the extent to which the consumption of a good or service is affected by alterations in the income levels of consumers.

Inferior Good

A type of good for which demand decreases when consumer income rises, contrary to normal goods where demand increases with rising income.

Excise Tax

A specific tax levied on particular goods or services at the point of manufacture or sale, often included in the price of the product.