The Average Price of Gasoline in Your Neighbourhood Is $1

question 114

Multiple Choice

The average price of gasoline in your neighbourhood is $1.30 per litre.Your neighbour, Diana tells you that you can "save a lot" by frequenting a gas station 30 kilometers outside your neighbourhood where the price of gasoline is $1.15 per litre However, she cautions you that there are usually long lines at that station.Is her suggestion beneficial to you?

• A)Yes, since gasoline is a necessity for car owners, the total cost savings would be relatively substantial.
• B)No, if one factors in the non-monetary opportunity costs (driving time and waiting in line), it could prove more costly to go to the lower-priced gasoline station.
• C)Yes, the lower price of gasoline at the rival station increases my purchasing power and enables me to consume more of other goods.
• D)No, my friend is misled; clearly, the lower priced gasoline must be of inferior quality and could damage vehicles.

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Definitions:

Subjective Sense

An individual's personal perspective or interpretation of experiences, feelings, or beliefs.

Me-Self

William James's term for the conscious sense of personal identity that comprises the self as known or the collection of subjective experiences.

I-Self

The aspect of self that involves self-awareness and self-recognition, as distinguished from the "Me-Self" which relates to the social roles and attributes one identifies with.

Mental Structure

Concepts or frameworks in psychology that represent how the mind organizes its cognitive processes or functions.