When Jaya Lewis was asked what it would take to get her to provide Eva Hillman an hour of tutorial lessons in economics, she replied,"$10." So Eva said,"Fine, I'll pay you $10." "No, no," Jaya, replied, the market price is $15!" Exasperated, Eva paid the $15. Did Jaya change her mind about the price during the conversation?
A) Yes, she realized that Eva was willing to pay more so changed her asking price from $10 to $15.
B) Yes, the $5 difference in price was obviously negotiable and Jaya went for the higher price
C) No, Eva changed her mind. At first she was willing to pay $10 then decided to pay the $15.
D) No, Eva was testing Jaya's willingness to supply tutorial lessons and discovered it was $15.
E) No, it was simply a case of Jaya's opportunity cost being less than market price so Jaya ends up with a $5 producer surplus

Question

Quizplus · Accepted Answer

Jaya initially stated a personal price of $10 but then referred to the market price of $15, indicating her awareness of the opportunity cost and market conditions, not a change in her personal valuation.

When Jaya Lewis Was Asked What It Would Take to Get