Question

Suppose Michael is willing to dive across town to save 40 percent on a sweatshirt with a list price of $80. If Michael is rational, this implies that he should:
Multple Choice:
O not be wiling to drive across town to save 40 percent on a microwave with a list price of $200
O be wiling to dive across town to save 40 percent on a book with a list price of $30
O be wiling to dnive across town to save 10 percent on a guitar with a list price of $320
O not be wiling to dive across town to save $35 on a shirt with a list price of $70

Answer 1

Answer:

The answer is: "be wiling to drive across town to save 10 percent on a guitar with a list price of $320".

Explanation:

As Micheal is willing to drive across town to save $32 on the sweat shirt ( calculated as list price x discount = $80 x 40%), it means that the total cost he incurred, including the income earning he sacrifices because of the time of travelling, the fuel, parking expenses and other costs..., should not be as much as $32.

So, he will be willing to drive across town to buy things as long as it save him $32 or above.

Thus, the choice "be wiling to drive across town to save 10 percent on a guitar with a list price of $320" is correct because he can save $32 (320 x 10%).

------

The choice: "not be wiling to drive across town to save 40 percent on a microwave with a list price of $200" is not correct because he can save up to $80 ( 200 x 40%) which is above his total cost.

The choice:" be wiling to dive across town to save 40 percent on a book with a list price of $30" is not correct because he can only save only $12.

The choice: "not be wiling to dive across town to save $35 on a shirt with a list price of $70" is not correct because he can save up to $35.