The Average Price of Gasoline in Your Neighborhood Is $3

question 106

Multiple Choice

The average price of gasoline in your neighborhood is $3.53 per gallon. Your neighbor Diana tells you that you can "save a lot" by frequenting a gas station 20 miles outside your neighborhood where the price of gasoline is $3.46 per gallon However, she cautions you that there 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.

---

Definitions:

Production Process

A sequence of operations or stages in manufacturing or the creation of goods and services, involving labor, materials, and equipment.

Customer Service

Activities and services provided by a business to support the satisfaction and needs of its customers.

Product Quality

The characteristics and attributes of a product that influence its ability to meet specified requirements or customer expectations.

Employee Interactions

The various forms of communication and engagement that occur between employees within an organization.