Question

Tabitha shares a flea market booth with her sister. Her share of the rent is $150 per month. She is considering moving to her own, larger booth which she will not have to share with anyone. The larger booth rents for $450 per month. Recently, you ran into Tabitha in the grocery store and she tells you that she has rented the larger booth. Tabitha is as rational as any other person. As an economics major, you rightly conclude that Group of answer choices 1. the cost of having one's own booth outweighs the benefits. 2. Tabitha figures that the additional benefit of having her own booth (as opposed to sharing) is at least $450. 3. Tabitha did not have a choice; her sister was overcharging her. 4. Tabitha figures that the additional benefit of having her own booth (as opposed to sharing) is at least $300.

Answer 1

Option 4 is correct

Step-by-step explanation:

The marginal benefit derived from extra cost added to having her own booth is higher compared to sharing a booth with her sister.