Asked by Brenda Townsend on Apr 28, 2024
Verified
Suppose that Julia receives a $20 gift card for the local coffee shop, where she only buys lattes and muffins. If the price of a latte is $4 and the price of a muffin is $2, then we can conclude that Julia
A) should only buy muffins.
B) should only buy lattes.
C) can buy 5 lattes or 10 muffins if she chooses to buy only one of the two goods.
D) can buy 5 lattes and 10 muffins with her $20 gift card.
Price
The amount of money required to purchase a good, service, or resource.
Lattes
Espresso-based coffee drinks that combine espresso with steamed milk, often served in cafes and coffee shops.
Muffins
Small, baked goods often sweetened and available in various flavors, serving as a quick breakfast or snack option.
- Understand the concept of opportunity cost in decision-making under scarcity.
- Understand the effects of variations in income and prices on the decisions of consumers and their budget limitations.
Verified Answer
KC
Kylie CalhounMay 02, 2024
Final Answer :
C
Explanation :
With $20, Julia can buy either 5 lattes ($4 each) or 10 muffins ($2 each), but not both in the quantities mentioned in option D.
Learning Objectives
- Understand the concept of opportunity cost in decision-making under scarcity.
- Understand the effects of variations in income and prices on the decisions of consumers and their budget limitations.