E4P - Tutorial 1

What principle is used to evaluate the decision in the given scenarios?

• Cost-benefit principle

• Supply and demand principle

• Opportunity cost principle

• Marginal utility principle

Answer explanation

The cost-benefit principle evaluates decisions by comparing the expected benefits to the costs involved. In the given scenarios, this principle helps determine if the benefits outweigh the costs, guiding the decision-making process.

In the first scenario, how much money do you save by driving to the other branch for the calculator?

• $5

• $10

• $15

• $20

Answer explanation

By driving to the other branch, you save $5 compared to the price at your current location. This makes the correct answer $5.

How long is the drive to the other branch in both scenarios?

• 20 minutes

• 30 minutes

• 10 minutes

• 40 minutes

Answer explanation

In both scenarios, the drive to the other branch takes 20 minutes. This is the consistent time mentioned, making it the correct answer among the options provided.

What is the cost of the laptop at the current store?

• $2,000

• $1,995

• $1,500

• $2,500

Answer explanation

The cost of the laptop at the current store is $2,000, which is the correct answer among the options provided. The other choices are either higher or lower than the actual price.

How much do you save on the laptop by going to the other branch?

• $5

• $10

• $15

• $20

Answer explanation

By going to the other branch, you save $5 on the laptop compared to the price at your current location. This makes $5 the correct answer.

What is the percentage discount on the calculator when you save $5?

• 50%

• 25%

• 10%

• 5%

Answer explanation

The calculator's original price must be $10, as saving $5 represents a 50% discount. Therefore, the correct answer is 50%.

What is the percentage discount on the laptop when you save $5?

• 0.25%

• 1%

• 5%

• 10%

Answer explanation

To find the percentage discount, divide the savings ($5) by the original price of the laptop. If the laptop costs $2000, then $5 is 0.25% of $2000. Thus, the correct answer is 0.25%.

What effect might influence your decision according to the solution?

• Framing effect

• Halo effect

• Bandwagon effect

• Placebo effect

Answer explanation

The framing effect influences decisions by presenting information in a way that highlights certain aspects, affecting perception and choice. This makes it the correct answer, as it directly relates to how decisions can be swayed.

According to the solution, what should decisions be based on?

• Costs and benefits

• Emotions

• Advertisements

• Peer pressure

Answer explanation

Decisions should be based on costs and benefits, as this approach allows for a rational evaluation of options, ensuring that choices lead to the most favorable outcomes rather than being influenced by emotions, advertisements, or peer pressure.

What do you forgo if you choose to buy at the other branch?

• Fuel cost and travel time

• Discounts

• Quality

• Warranty

Answer explanation

By choosing to buy at the other branch, you forgo fuel cost and travel time, as you would not need to travel to the original location. The other options, such as discounts, quality, and warranty, are not directly related to the choice of branch.