A College Student Is Taking a Full Course Load,working 20

question 51

Multiple Choice

A college student is taking a full course load,working 20 hours per week,and still has to take out a student loan to cover tuition.One day,he sees a classmate driving a new Lexus LFA sports coupe (price: $375,000) and feels he just has to have one for himself.What factor is most likely to prevent a successful marketing exchange between the student and the local Lexus dealer located in an affluent suburb about 20 miles from his university?

• A)The local Lexus dealer only has one Lexus LFA sports coupe in stock-red,which is the color he wants.
• B)The student does not have the resources to qualify for a $375,000 auto loan.
• C)Although the Lexus LFA sports coupe is a great car,there may be other cars with better gas mileage and resale value.
• D)He's afraid that if someone at school sees him with the car,he might lose his student loan.
• E)His girlfriend wants him to drive a Kia Soul.

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Definitions:

Total Cost Curve

A graphical representation in economics that shows the total cost of producing different quantities of a good or service.

Break-even Quantity

The number of units that must be sold for total revenue to equal total costs, resulting in no profit or loss.

Fixed Costs

Expenses that do not change in total over a short time period, regardless of the level of goods or services produced.