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North-Holland Pub. Co.




This paper reports the results of a survey conducted~ in the Massachusetts Institute of Technology campus dining hall~ The aim of the survey was to delineate students' perceptions of marginal cost,~ in a very specific, but not uncommon, situation. A majority of the respondents' answers suggest a complete misunderstanding of the relevant marginal costs. This study attempts to find out how individuals perceive ~their opportunity sets in a specific choice situation. The individuals studied are ~students who have meal plans at the M.LT. dining halls. Each term students pay a high price for the meals until a certain number of meals have been purchased. Thereafter there is a substantial discount of 42 percent. For a student who knows he will pass the limit, the marginal cost of an additional meal is the discounted price.

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