George would like to be financially protected from unexpected malfunctions and maintenance costs associated with his new dishwas
her, but not so strongly that he is willing to pay $50 per month for an insurance policy. In George's case, he is indifferent between purchasing insurance and not
the perceived benefit of the policy is greater than the cost C. the cost of the policy exceeds George's perceived benefit
the cost of the policy is less than George's perceived benefit
C. the cost of the policy exceeds George's perceived benefit
Explanation:
In microeconomic theory, there is a concept called reserve price. The reserve price is the maximum price at which a consumer is willing to pay to obtain the benefit of the purchase of a product or service. If George has decided not to buy the insurance, even though he considers it important, it means that the price of the insurance policy is greater than George's reserve price for insurance. In short, the cost of politics goes beyond the benefit perceived by George.
It creates the need for natural resources It created a demand for larger markets in which to sell the surplus slave labor It created new agricultural techniques that required Europe to find farmable land overseas
