You Drive to School Every Day

question 20

Multiple Choice

You drive to school every day.This can be viewed as a process.It takes you approximately 15 minutes to get from your apartment to school,but the exact time varies from day to day.Which of the following would be considered special cause variation?

• A)The number of red traffic lights you encounter
• B)A major accident along the route you take ties up traffic for a long period of time
• C)Getting stuck behind a car going under the speed limit for a few blocks
• D)Driving to work in a heavy rain storm

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Definitions:

Downward-Sloping Demand

A market condition reflected in a demand curve where the quantity demanded of a good decreases as the price of that good increases, and vice versa.

Total Surplus

The sum of consumer and producer surplus; a measure of the overall benefit to society from a market transaction.

Perfectly Price-Discriminated

A pricing strategy situation where a seller charges the maximum possible price for each unit consumed that consumers are willing to pay, thereby capturing all potential consumer surplus.

Perfect Price Discrimination

The act of charging each consumer the maximum price that they are willing to pay for a product, thereby capturing the entire consumer surplus.