Which of the following scenarios best illustrates a consumer involved in an exchange for a service?

• A. A person purchases a new smartphone online.
• B. A shopper buys a loaf of bread from a bakery.
• C. A farmer sells apples at a local market.
• D. A student pays a tutor to help with math homework.

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the difference between goods and services. Goods are tangible items that can be touched and owned, such as smartphones, bread, or apples. Services are intangible activities or benefits provided by one party to another, such as tutoring, haircuts, or repairs.
2. Step 2: Analyze each scenario to identify whether the transaction involves a good or a service. For example, purchasing a smartphone, bread, or apples involves buying physical products (goods).
3. Step 3: Recognize that paying a tutor to help with math homework involves receiving an intangible benefit — the tutor's knowledge and assistance — which is a service.
4. Step 4: Conclude that the scenario where a student pays a tutor best illustrates an exchange for a service because it involves paying for an activity or expertise rather than a physical product.
5. Step 5: Remember that in microeconomics, distinguishing between goods and services helps understand consumer behavior and market transactions.