The Average Price of Gasoline in Your Neighborhood Is $2

question 78

Multiple Choice

The average price of gasoline in your neighborhood is $2.15 per gallon.Your neighbor, Diana tells you that you can "save a lot" by frequenting a gas station 20 miles outside your neighborhood where the price of gasoline is $2.06 per gallon However, she cautions you that there are usually long lines at that station.Is her suggestion beneficial to you?

• A)Yes, since gasoline is a necessity for car owners, the total cost savings would be relatively substantial.
• B)No, if one factors in the non-monetary opportunity costs (driving time and waiting in line), it could prove more costly to go to the lower-priced gasoline station.
• C)Yes, the lower price of gasoline at the rival station increases my purchasing power and enables me to consume more of other goods.
• D)No, my friend is misled; clearly, the lower-priced gasoline must be of inferior quality and could damage vehicles.

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Definitions:

Observational Learning

Observational learning involves acquiring new behaviors, skills, or attitudes by watching and imitating others, emphasizing the importance of models in learning.

Classical Conditioning

A habituation technique wherein a response that is initially evoked by a secondary stimulus is eventually invoked by the primary stimulus alone, thanks to the repeated pairing of the stimuli.

Latent Learning

A form of learning that occurs without any obvious reinforcement and is not demonstrated until there is motivation to do so.

Shaping

The process in operant conditioning that involves reinforcing behaviors that are closer to the desired behavior.