Consider the following hypothetical scenarios: Scenario A: You are about to purchase a pair of 7 for All Mankind jeans for $175 and a t-shirt for $45.The sales attendant at the store tells you that the pair of jeans you wish to buy is on sale for $160 at another store, located about a 20-minute drive away.
Scenario B: You are about to purchase a pair of 7 for All Mankind jeans for $175 and a t-shirt for $45.The sales attendant at the store tells you that the t-shirt you wish to buy is on sale for $30 at another store, located about a 20-minute drive away.
Based on standard economic theory, under which scenario would you make the 20-minute trip to the other store?
A)Scenario B because a $15 saving amounts to a substantial discount (about 33 per cent)
B)in either scenario if I think a $15 savings is worth the 20-minute trip
C)in none of these scenarios if I think the $15 saving is not worth the 20-minute trip
D)B and C are correct answers.

Question

Quizplus · Accepted Answer

The correct answers are B and C because the decision to make the trip for a $15 saving depends on the individual's valuation of their time and the perceived value of the saving, which can be significant in both scenarios but for different reasons (a larger percentage saving on the t-shirt in Scenario B, and the same monetary saving in both scenarios).

Consider the Following Hypothetical Scenarios: Scenario A: You Are About