From an Economic Perspective, When Consumers Leave a Fast-Food Restaurant

question 246

Multiple Choice

From an economic perspective, when consumers leave a fast-food restaurant because the lines to be served are too long, they have concluded that the

• A) marginal cost of waiting is less than the marginal benefit of eating in that restaurant.
• B) marginal cost of waiting is greater than the marginal benefit of eating in that restaurant.
• C) management is exhibiting irrational behavior by not considering the marginal cost and the marginal benefit of standing in line by the consumer.
• D) management is making an assumption that other things are equal.

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Definitions:

Accrued Interest

The amount of interest that has been incurred but not yet paid over a particular period.

Government Bonds

Debt securities issued by a government to support government spending, which investors can purchase, typically considered low-risk investments.

Accrued Interest

The accumulated interest on a note payable or receivable that has been earned but not yet received or paid out.

Semiannual Interest

Interest that is calculated and paid twice a year, often on bonds or loans.