Tony Notes That an Electronics Store Is Offering a Flat

question 56

Multiple Choice

Tony notes that an electronics store is offering a flat $20 off all prices in the store. Tony reasons that if he wants to buy something with a price of $50, it is a good offer, but if he wants to buy something with a price of $500, it is not a good offer. This is an example of:

• A) inconsistent reasoning; saving $20 is saving $20.
• B) the proper application of the cost-benefit principle.
• C) rational choice because in the first case he saves 40% and in the second case he saves 4%.
• D) marginal cost equals marginal benefit thinking.

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Definitions:

Need For Achievement

The motive to engage in and succeed at entrepreneurial achievement behavior.

Stimulation

The activity of encouraging something to grow, develop, or become active, often related to sensory or intellectual input.

Memory Task

A psychological test or exercise designed to assess or enhance an individual's ability to remember information.