1. AJ is buying a new car and chooses to pay $250 for upgraded floor mats because he is already spending $24,000; the $250 is only about 1 percent of the purchase price. This describes an example of

Question

a. taking into account the opportunity costs of buying the car and making the best choice.
b. relative value because he is comparing the value of the floor mats relative to the value of the car.
c. the best way AJ can spend his money because he is thinking of everything he could do with his money.
d. the unseen alternatives of his decision, such as saving money or paying for college.

Answer 1

b. relative value because he is comparing the value of the floor mats relative to the value of the car.

Answer 2

2. The reason people cannot have everything they want is because of
a. scarcity.
b. explicit alternatives.
c. shortages.
d. credit.

Answer 3

a. scarcity.

Answer 4

3. Tati made an impulse purchase by buying a $1000 handbag. An impulse purchase means that she most likely did not think of the _________________alternatives for the $1000.
a. best
b. explicit
c. implicit
d. worst

Answer 5

b. explicit.