Mike Wants to Buy a Used Car from Jim

question 127

Multiple Choice

Mike wants to buy a used car from Jim.Jim wants to sell his car for $5,600.Before buying the car,Mike wants to take the car to a mechanic,for a complete inspection.Mike estimates the costs for this inspection at $50 and his expected benefits at $60.What should Mike do and why?

• A) Take the car to the mechanic because the expected benefit is lower than the expected cost.
• B) Buy the car because Jim is a friend and he would never sell a 'lemon'
• C) Don't take the car to the mechanic because expected benefit is lower than the expected cost.
• D) Take the car to the mechanic because the expected benefit is greater than the expected cost.
• E) Don't take the car to the mechanic because expected benefit is greater than the expected cost

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Definitions:

Systematic Discrimination

Processes and practices that lead to consistent and widespread unequal treatment of individuals based on race, gender, or other characteristics.

Wage Paid

The amount of money that employers pay to employees for their labor or services within a given time period.

Workers

Individuals employed by others or self-employed, contributing labor to produce goods or provide services.

Human Capital

The sum of abilities, expertise, and learned information that an individual or group has, considered in relation to its worth or expense for a company or nation.