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A consumer is deciding where to buy their weekly groceries. They estimate the total cost of their grocery basket is $90 at the supermarket and $115 at the local corner shop. The round trip to the supermarket takes 30 minutes and costs $3 in gas, while walking to the corner shop takes 5 minutes with no gas cost. The consumer values their time at $12 per hour. To make the most economically rational choice, which analytical step should the consumer perform?
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Social Science
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Economy
CORE Econ
The Economy 1.0 @ CORE Econ
Economics
Ch.2 User-centered design process - User Experience Design - Winter 23 @ UI Design in UI @ University of Michigan - Ann Arbor
UI Design in UI @ University of Michigan - Ann Arbor
User Experience Design - Winter 23 @ UI Design in UI @ University of Michigan - Ann Arbor
UI @ University of Michigan - Ann Arbor
User Experience Design @ UI Design in UI @ University of Michigan - Ann Arbor
University of Michigan - Ann Arbor
Ch.2 Technology and incentives - The Economy 2.0 Microeconomics @ CORE Econ
The Economy 2.0 Microeconomics @ CORE Econ
Introduction to Microeconomics Course
Analysis in Bloom's Taxonomy
Cognitive Psychology
Psychology
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A consumer needs to buy a basket of goods including milk, bread, and eggs. The local corner shop is a 1-minute walk away, while a large supermarket is a 10-minute drive. The consumer observes that milk is slightly more expensive at the supermarket than at the corner shop. However, they still decide to make the trip to the supermarket to buy all their items. Which of the following provides the strongest economic justification for this choice?
Grocery Shopping Decision
If widespread inflation causes all grocery prices to increase by 10% at both a large supermarket and a local corner shop, the economic incentive for a consumer to travel to the supermarket for its comparatively lower prices will be weakened.
Consumer Choice and Price Changes
Consumer Choice and Price Changes
Analyzing Consumer Shopping Decisions
A consumer typically buys a weekly basket of groceries at a large supermarket for $100, saving $20 compared to the $120 price at their local corner shop. This week, the supermarket's price for the same basket rises to $115, while the corner shop's price remains $120. The consumer, considering the time and cost of travel to the supermarket, decides to buy from the corner shop instead. Which economic principle best explains this change in the consumer's decision?
A consumer is deciding where to buy their weekly groceries. They estimate the total cost of their grocery basket is $90 at the supermarket and $115 at the local corner shop. The round trip to the supermarket takes 30 minutes and costs $3 in gas, while walking to the corner shop takes 5 minutes with no gas cost. The consumer values their time at $12 per hour. To make the most economically rational choice, which analytical step should the consumer perform?
A consumer is considering a trip to a large supermarket instead of their local corner shop. Assume the time and cost of travel are the same for any trip. Evaluate the following two independent scenarios:
Scenario 1: The total cost for a basket of goods is $50 at the corner shop and $40 at the supermarket. Scenario 2: The total cost for a different basket of goods is $200 at the corner shop and $190 at the supermarket.
In which scenario is the economic incentive to travel to the supermarket stronger?
Calculating the True Cost of Groceries