Dave Is Undecided About Whether to Eat at a Restaurant

question 171

Multiple Choice

Dave is undecided about whether to eat at a restaurant or to order pizza at home. He then obtains a coupon for 20 percent off at the restaurant and decides to go there to eat. This is an example of

• A) someone using criteria other than price to make a consumption decision.
• B) a lower price leading a consumer to substitute more of the less expensive good for the relatively more expensive good.
• C) a lower price leading a consumer to buy more of a good because of the income effect.
• D) a consumer making a decision irrationally.

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Definitions:

Functional Levels

Different layers within an organization, each responsible for specific, specialized areas of work or operations.

Quantity Demanded

The total amount of a good that consumers are willing and able to purchase at a given price over a specified period of time.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price.

Equilibrium Price

The price level at which the market's offered goods and demanded goods are in balance.