If Jared declines to purchase a new bicycle priced at $200, according to the rule of rational choice, what will be the expected marginal benefit of the bicycle for Jared?
A) less than $250
B) less than $100
C) less than $200
D) more than $200

Question

Quizplus · Accepted Answer

The expected marginal benefit of the bicycle for Jared would be less than $200 since he chose not to purchase it at that price. It could be any amount less than $200, but we can only be sure that it is not more than $200. Therefore, the best choice is C.

If Jared Declines to Purchase a New Bicycle Priced at $200