A Used Car Was Recently Priced at $20,000

question 314

Multiple Choice

A used car was recently priced at $20,000.00. Seeing the car, Bobby thought, "It's nice, but if I have to pay more than $19,500 for this car, then I would rather do without it." After negotiations, Bobby purchased the car for $19,250.00. His consumer surplus was equal to

• A) $19,500.00.
• B) $1,750.00.
• C) $250.00.
• D) $0.00.

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Definitions:

Over Budget

Over budget refers to a situation where actual spending exceeds the planned or allocated amount for a particular budget category.

Budget

An estimate of income and expenditure for a set period of time, often used as a plan for financial operations.

Activity Base

A measure used for allocating costs to cost objects, typically related to the level of activity or volume of goods produced that incurs costs.

Advertising Campaigns

A series of advertisement messages that share a single idea and theme which make up an integrated marketing communication (IMC).