The Expected Marginal Benefit to You from Purchasing a New

question 171

Multiple Choice

The expected marginal benefit to you from purchasing a new sport utility vehicle is $20,000. The price of the new sport utility vehicle is $22,000.

• A)​If you are acting rationally, you will borrow $2,000 and purchase a new sport utility vehicle.
• B)​You will not purchase the new sport utility vehicle at this time if you are acting rationally.
• C)​If you do not purchase the new sport utility vehicle, your net loss will be $2,000.
• D)​If you are acting rationally, you will purchase sport utility vehicles until the marginal cost of doing so falls to $20,000.

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Definitions:

Just in Time

An inventory management strategy that aligns raw-material orders from suppliers directly with production schedules to reduce inventory costs.

Inventory Management

The process of ordering, storing, and using a company's inventory, including the management of raw materials, components, and finished products.

Quick Response (QR)

A type of matrix barcode that can be scanned using a smartphone or QR code reader to provide access to information, such as websites or payment platforms.

Distribution Center

A facility that houses products for storage and redistribution to retailers, wholesalers, or directly to consumers, optimizing the supply chain.