Why you would have definitely chosen the camry

Reference no: EM13188319

You have just purchased a new Ford Taurus for $20,000, but the most you could get for it if you sold it privately is $15,000. Now you learn that Toyota is offering its Camry, which normally sells for $25,000, at a special sale price of $20,000. If you had known before buying the Taurus that you could buy a Camry at the same price, you would have definitely chosen the Camry. Is this True or False? From what we are told of your preferences, it follows that if you are a rational utility maximizer, you should definitely not sell the Taurus and buy the Camry. Explain why this is the case.

Reference no: EM13188319

Questions Cloud

What is the opportunity cost of using the unused bundling : The World of Videos operates a retail store that rents move videos. For each of the last 10 years, World of Videos has consistently earned profits exceeding $25,000 per year. The store is located on prime real estate in a college town. World of Vi..

What is the probability that her systolic blood pressure : if a woman between the ages of 18 and 24 is randomly selected, what is the probability that her systolic blood pressure is greater than 140 with a mean of 114.8 and a standard deviation of 13.1?

Calculate the marginal revenue : Create an inverse demand of P = a - bQ, inverse demand of P = 11 - 2Q. a) Calculate the marginal revenue (MR). b) Find the quantity and price which maximize profits when marginal cost is zero (round off to two decimal places for any number that is ..

What can be the possible ways to promote exports : Among many macroeconomic problems of Pakistan, trade deficit is one of the major problems. The policy of devaluation of Pakistani rupee is usually adopted to reduce this trade deficit. Our currency depreciated from Rs. 24.84 per dollar to Rs. 85.5..

Why you would have definitely chosen the camry : You have just purchased a new Ford Taurus for $20,000, but the most you could get for it if you sold it privately is $15,000. Now you learn that Toyota is offering its Camry, which normally sells for $25,000, at a special sale price of $20,000.

Explain the relative prices of water and diamonds : Classical economists struggled with the "Water-Diamond Paradox" which seeks an explanation for why water (which is very useful) has a low price, whereas diamonds (which are not particularly important to life) have a high price.

Compute the ph of a solution using two decimal places : Calculate the pH of a solution prepared by dissolving 0.40g of Na2O in enough water to make 0.600 L of solution? Express your answer using two decimal places.

Determine denniss monthly budget line : Dennis is only interested in two things, eating food and playing the online multiplayer game Globe of Gratuitous Violence (GoGV) - a close competitor to world of warcraft. Dennis's utility is given by the function U(qf,qg) = 0.25ln(qf) + 0.75ln(qg..

State equations for all of the chemical reactions : Write balanced molecular equations for all of the chemical reactions involved in the copper cycle experiment. There are eight of them. (Note that four reactions are descibed in the recovery

User Account

All Pages