Two College Students,Josh and John,are Spending Spring Break in Boston

question 385

Multiple Choice

Two college students,Josh and John,are spending spring break in Boston to visit Harvard University's law school.Josh buys a cup of coffee each morning at the local Dunkin' Donuts rather than from one of the local coffee shops.John claims that Josh is irrational because he never purchased Dunkin' Donuts' coffee at home,and Dunkin' Donuts' coffee costs more than the coffee sold by local shops.An economist would most likely explain Josh's behavior by suggesting that

• A) Josh's behavior is rational,but John's behavior is clearly irrational.
• B) Josh's behavior is clearly irrational,but John's behavior is rational.
• C) the Dunkin' Donuts brand name suggests consistent quality.
• D) the advertising by Dunkin' Donuts in Boston is more persuasive than the advertising by Dunkin' Donuts in Josh and John's home town.

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Definitions:

Total Revenue

The total amount of money received by a company for goods sold or services provided during a certain time period.

Total Cost

The overall amount of money spent on production, which includes both fixed and variable expenses.

Market Price

The prevailing market rate at which a service or asset is offered for purchase or sale.

Firm

A business organization, such as a corporation, partnership, or sole proprietorship, that sells goods or services in exchange for money.