The Federal Government Requires a Car Manufacturer to Have a Minimum

question 31

Multiple Choice

The federal government requires a car manufacturer to have a minimum miles per gallon (mpg) average over the cars it makes. Suppose that the models and mpg's for a manufacturer are Corsair (31 mpg) , Futura (30 mpg) , Retro (37 mpg) , and Envy (44 mpg) . Twenty percent of the cars sold are Corsairs, 30% are Futuras, 40% are Retros, and 10% are Envys. Find the average mpg for this manufacturer.

• A) 35.5 mpg
• B) 34.0 mpg
• C) 34.4 mpg
• D) None of the above

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Definitions:

Public Goods

Products or services that are made available to all members of a society, regardless of who pays for them, featuring non-excludability and non-rivalry.

Unregulated Market

A market free from governmental control, where transactions are determined solely by the forces of supply and demand.

Imperfect Information

A situation where economic decision-makers do not have complete information or have misinformation, affecting their decisions.

Individual Preferences

refers to the specific desires, choices, and priorities of an individual, especially regarding consumption of goods and services.