Jared declines to purchase a new bicycle priced at $200.An economist would conclude that:

Question

Quizplus · Accepted Answer

An economist would conclude that Jared's decision not to purchase the bicycle suggests that the expected marginal benefit (the additional benefit gained from consuming one more unit of a good) of the bicycle to Jared is less than $200. Otherwise, Jared would have bought the bicycle because he would have gained a net benefit from the purchase. Option A is not correct because Jared may enjoy cycling even though he didn't buy the bike. Option B is not correct since the question stated that he did not purchase the bike, and the threshold marginal benefit of the bike is $200. Option D cannot be determined from the information given.

Jared Declines to Purchase a New Bicycle Priced at $200