Billy Mac Tailor Drives an Eighteen-Wheeler CG Carriers

question 18

Multiple Choice

Billy Mac Tailor drives an eighteen-wheeler CG Carriers. He always stops at All Bright truck stops to by diesel fuel. He is a preferred customer and gets a free meal and shower worth $10.00. But All Bright charges $12.00 more for a fill up than most competitors. Which of the following is true?

• A) CG Carriers gets a benefit of $22.00 because Tailor is a preferred customer.
• B) CG Carriers has a wealth reduction of $2.00 even though they do not know about Tailor's actions.
• C) There is a wealth transfer to Billy Mac Tailor and CG Carriers has a wealth reduction of $12.00 .
• D) Billy Mac Tailor increases his income by $10.00 and CG Carriers also benefits.

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Definitions:

Price Rise

An increase in the cost of goods or services, often equated with inflation but can also indicate a market adjustment due to supply and demand.

Quantity Fall

This term is not widely recognized as a standard economic or financial term. NO.

Dominant Strategy

A strategy in game theory that yields the highest payoff for a player no matter what the other players do.

Annual Profit

The total earnings a company makes in one fiscal year after all expenses and taxes have been subtracted from its total revenue.