Fran Runs a Doughnut Shop in a Tiny 3-Person Town

question 94

Multiple Choice

Fran runs a doughnut shop in a tiny 3-person town.Fran's rational consumers have the following demand schedules: $$\begin{array} { | l | l | l | l | } \hline \text { Price } & \text { Art } & \text { Betty } & \text { Cal } \\\hline 10 \text { cents } & 10 & 4 & 6 \\\hline 25 \text { cents } & 9 & 2 & 5 \\\hline 35 \text { cents } & 7 & 1 & 5 \\\hline 50 \text { cents } & 5 & 0 & 4 \\\hline\end{array}$$
From the data you can assume that Betty

• A) thinks that doughnuts are an inferior good.
• B) would get more marginal utility from her first doughnut than anything else that she buys for 50 cents.
• C) would get less marginal utility from her first doughnut than anything else that she buys for 50 cents.
• D) is not a rational consumer.

---

Definitions:

Incorporation

The process of legally declaring a corporate entity as separate from its owners, providing limited liability and other benefits.

Individual Farmers

Independent agricultural producers who manage and operate their own farming businesses.

Large Corporations

Businesses that operate on a vast scale, often with a global presence, having significant market influence and a complex organizational structure.