The Average Price of Gasoline in Your Neighborhood Is $2

question 78

Multiple Choice

The average price of gasoline in your neighborhood is $2.15 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 $2.06 per gallon 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:

Reference Group

A social group that individuals use as a standard for evaluating their own behavior, values, and attitudes.

Example

A representative form or instance that is typical of a group or set and is often used for illustration or explanation.

Technological Differences

The variations in technology across different cultures, societies, or historical periods, impacting development, efficiency, and lifestyles.

Social Differences

Variations in the socioeconomic status, cultural background, or demographic characteristics among individuals or groups within a society.