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Posts: 204
1 months ago
Explain why a consumer may be willing to drive 20 miles to save 10% on a $3 gallon of milk, but is not willing to drive the same 20 miles to save 3% on a $500 refrigerator.
Textbook 

Microeconomics: Principles, Applications, and Tools


Edition: 8th
Authors:
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wrote...
Posts: 208
1 months ago
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In assessing numerical changes, the brain appears to be naturally inclined to work in percentage or relative terms rather than absolute terms. Saving 10% seems better than saving 3%, even though the 10% saving on the gallon of milk amounts to only $0.30, whereas the 3% saving on the refrigerator amounts to $15.
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1 months ago
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