Suppose That Dorothy and Tim Are Out to Lunch Together

question 142

Multiple Choice

Suppose that Dorothy and Tim are out to lunch together, and both are on restricted-calorie diets. Which of the following would be the best example of counterregulation?

• A) Dorothy notices that Tim has ordered a cheeseburger (and broken his diet), and therefore she feels that she has "permission" to break her diet too. She then goes ahead and orders a cheeseburger for herself.
• B) After ordering a cheeseburger for lunch, Dorothy thinks to herself, "well, my diet is already blown for the day; I might as well order a dessert too." She then goes ahead and orders a deluxe chocolate milkshake.
• C) Dorothy orders a cheeseburger and milkshake for lunch, and thus blows her diet for the day. When Tim starts to order a similar lunch, though, Dorothy chastises him and tells him that he should try to eat a less fattening lunch.
• D) After ordering a cheeseburger and milkshake for lunch, and thus blowing her diet for the day, Dorothy feels remorseful and decides to go to the gym and skip dinner that night.

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Definitions:

Willingness-to-Pay

The maximum amount a consumer is prepared to spend on a good or service.

Natural Monopoly

A market condition where due to high fixed costs or unique resources, a single company can supply a product or service at a lower cost than any potential competitors.

Average Cost

The cost per unit of output, computed by dividing the total cost of production by the number of units produced, often used to assess the efficiency and profitability of production processes.

Antitrust Laws

Legislation enacted to prevent new monopolies from forming and to break up those that already exist in order to ensure fair competition in the market.