After her recent success at the Grammys, Beyonc and Jay-Z decided to fly straight to Tasmania for a relaxing holiday, where they are free from

After her recent success at the Grammy’s, Beyoncé and Jay-Z decided to fly straight to Tasmania for a relaxing holiday, where they are free from media attention or stress and able to behave rationally. While wandering Salamanca Market (in disguise) one morning they come across someone selling a Tasmanian dessert consisting of raspberries, small pancakes and ice cream for $12. Beyoncé buys a Tasmanian dessert and eats it, while Jay-Z does not.

a. Explain why the benefit Beyoncé receives from eating the Tasmanian dessert is less than, equal to or greater than $12 and why Beyoncé’s net benefit of purchasing and consuming the Tasmanian dessert is negative, positive or equal to zero. (6 marks)

b. Explain why the benefit Jay-Z would receive from eating a Tasmanian dessert is less than, equal to or greater than $12 and why Jay-Z s net benefit of purchasing and consuming the Tasmanian dessert is negative, positive or equal to zero. (6 marks)

c. Jay-Z suggests that Beyoncé buys and eats a second Tasmanian dessert, but Beyoncé declines. What does this suggest about Beyoncé’s benefit and net benefit of a second Tasmanian dessert? (4 marks)

d. Suppose that seller says “Ahh you are in luck because the second Tasmanian dessert is only $8”. Beyoncé agrees to buy a second Tasmanian dessert and eats it. What does this and the information in c suggest about Beyoncé’s benefit and net benefit of a second Tasmanian dessert? (4 marks)

e. In the afternoon they visit the seller at Salamanca again and the Tasmanian desserts are looking just as good as they did in the morning. Now Jay-Z buys a Tasmanian dessert and eats it. What does this suggest about the benefit of consuming goods across time? Use Jay-Z’s behaviour in the morning and afternoon to illustrate your answer.