Question

Lydia is a senior in high school. She works 20 hours a week at a popular clothing store. She is trying to save as much money as possible for her college tuition. However, she has to buy a dress for prom, pay her car insurance, and get a birthday gift for her sister. This week she received a $400 paycheck. She wants to deposit the entire check in her savings account for her college tuition, but she stops herself. She decides instead to put $100 in the bank, spend $200 for her prom dress, pay $80 for her car insurance, and buy her little sister a $20 birthday gift. While shopping, she sees a doll worth $21, which she thinks her sister will absolutely love. As a result, she decided to buy the more expensive doll and spend less on her dress.

Did Lydia make an all-or-nothing or a marginal decision while spending her money? Justify your response.

Answer 1

To be honest im in middle school and this is quite tricky.but ill try my best.

Answer:

Money

Step-by-step explanation:

In this case, Lydia does not have enough money to buy a birthday present for her sister, pay her car insurance and buy herself a prom dress. Money is always a scarce resource, and in this case she is $1 short. She could get the money from her bank account but that would lower her savings for college. Money for college is also scarce.