Tony notes that an electronics store is offering a flat $20 off all prices in the store. Tony reasons that if he wants to buy something with a price of $50, it is a good offer, but if he wants to buy something with a price of $500, it is not a good offer. This is an example of:
A) inconsistent reasoning; saving $20 is saving $20.
B) the proper application of the cost-benefit principle.
C) rational choice because in the first case he saves 40% and in the second case he saves 4%.
D) marginal cost equals marginal benefit thinking.
Correct Answer:
Verified
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