Suppose That Two Types of Indistinguishable Coffee Beans Are Imported

question 8

Multiple Choice

Suppose that two types of indistinguishable coffee beans are imported to the U.S.: those grown in the mountains of South America and those grown in greenhouses in Canada.Mountain grown coffee produces a better tasting coffee,but buyers cannot distinguish the beans by sight or smell.Only the importers know the source of the beans.Buyers value mountain grown beans at $10 a pound and greenhouse grown beans at $3 a pound.Assume that 70% of imported beans are mountain grown,and 30% are greenhouse grown.
For a naïve buyer,the reservation price of a pound of these coffee beans is

• A)$9.80
• B)$8.70
• C)$7.00
• D)$7.90

---

Definitions:

Objectivity

The practice of maintaining impartiality and neutrality, avoiding personal bias in judgment or analysis.

Positive Relationships

Connections between individuals or groups characterized by mutual respect, cooperation, and positive outcomes.

Stakeholders

Individuals or groups interested in or affected by the outcome of a project, decision, or policy, including but not limited to, employees, customers, and investors.

Audience Needs

The requirements, expectations, or preferences of the intended recipients of a message or performance.