Examlex

Solved

Tammy and Tad's Father Has Given Each of Them a Debit

question 109

Essay

Tammy and Tad's father has given each of them a debit card and allows each of them to use the card to spend $500 each month. Tammy and Tad use their $500 to buy only CDs and gasoline. In February, the price of a CD was $10 and the price of gasoline was $1 per gallon. At these prices, Tammy purchased 45 CDs and 50 gallons of gas. Tad consumed 20 CDs and 300 gallons of gas. For the month of March, Tammy and Tad's father lost the records indicating who had which debit card. From the bank statement in March, their father learned that the price of a CD was $12 and a gallon of gas cost $0.80. The first debit card was used to purchase 235 gallons of gas and 26 CDs. The second debit card was used to purchase 265 gallons of gas and 24 CDs. Using revealed preference theory, identify which card Tammy must possess.


Definitions:

Biomedical Therapies

Treatments for psychological disorders that involve medical or physical procedures to alter brain function, such as medication, surgery, or electroconvulsive therapy.

Emotion Therapies

Psychological treatments focusing on helping individuals manage and understand their emotional reactions.

Behavior Therapies

A type of psychotherapy that focuses on changing undesirable behaviors through conditioning and other learning techniques.

Unconscious Mind

The part of the mind that is inaccessible to the conscious mind but influences thoughts, feelings, and behaviors.

Related Questions