Allison's Auto Art Is a Company That Applies Pinstripes to Vehicles.Allison's

question 151

Multiple Choice

Allison's Auto Art is a company that applies pinstripes to vehicles.Allison's cost for a basic 1-colour pinstriping job is $35,and she charges $95 for this service.For a total price of $175,Allison will apply a fancier 3-colour pinstripe to an automobile,a service that adds an additional $40 to the total cost of the package.Should Allison continue to offer the 3-colour pinstripe application?

• A) Yes, she still makes a profit by selling the 3-colour application.
• B) Yes, but only if she lowers the price of the 1-colour application.
• C) No, her marginal benefit is less than her marginal cost.
• D) More information is needed for Allison to make this decision.

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Definitions:

Set-Point Model

A theory suggesting that individuals have a genetically predetermined baseline weight or happiness level that the body regulates and maintains.

Lose Weight

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Gain Weight

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Overeating Study

Research examining the factors, patterns, and effects of consuming food in greater quantities than needed for energy requirements.