Multiple Choice
Scenario 8-2
Roland mows Karla's lawn for $25. Roland's opportunity cost of mowing Karla's lawn is $20, and Karla's willingness to pay Roland to mow her lawn is $28.
-Refer to Scenario 8-2. Assume Roland is required to pay a tax of $3 each time he mows a lawn. Which of the following results is most likely?
A) Karla now will decide to mow her own lawn, and Roland will decide it is no longer in his interest to mow Karla's lawn.
B) Karla is willing to pay Roland to mow her lawn, but Roland will decline her offer.
C) Roland is willing to mow Karla's lawn, but Karla will decide to mow her own lawn.
D) Roland and Karla still can engage in a mutually-agreeable trade.
Correct Answer:
Verified
Correct Answer:
Verified
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