Two college students,Josh and John,are spending spring break in Boston to visit Harvard University's law school.Josh buys a cup of coffee each morning at the local Dunkin' Donuts rather than from one of the local coffee shops.John claims that Josh is irrational because he never purchased Dunkin' Donuts' coffee at home,and Dunkin' Donuts' coffee costs more than the coffee sold by local shops.An economist would most likely explain Josh's behavior by suggesting that

Question

Quizplus · Accepted Answer

The economist would suggest that Josh is buying Dunkin' Donuts coffee because the brand name suggests consistent quality. This is a rational behavior as Josh is familiar with the brand and is willing to pay a premium for the assurance of quality. This behavior may not be irrational even if Dunkin' Donuts' coffee costs more than that sold by local shops. Therefore, option (C) is the best choice.

Two College Students,Josh and John,are Spending Spring Break in Boston