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Caroline is an artist. She purchases canvas, paints, brushes, and accessories for $100. She sells one of her original paintings to an art gallery for $2.000, even though an art lover will pay the gallery $5,000 for that painting. How much value does the art gallery add? O $5,000 O $1,900 O $4,900 O $100 O $3,000

Caroline is an artist. She purchases canvas, paints, brushes, and accessories for $100. She sells one of her original paintings to an art gallery for $2.000, even though an art lover will pay the gallery $5,000 for that painting. How much value does the art gallery add? O $5,000 O $1,900 O $4,900 O $100 O $3,000

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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**Problem Statement:** Caroline is an artist. She purchases canvas, paints, brushes, and accessories for $100. She sells one of her original paintings to an art gallery for $2,000, even though an art lover will pay the gallery $5,000 for that painting. How much value does the art gallery add? **Options:** - $5,000 - $1,900 - $4,900 - $100 - $3,000 **Solution Explanation:** 1. **Cost to Caroline:** Caroline uses $100 worth of materials. 2. **Sale to Gallery:** She sells the painting to the gallery for $2,000. 3. **Sale by Gallery:** The gallery sells the painting for $5,000. **Calculating Value Added by the Gallery:** - The gallery adds value by selling the painting for $5,000, which is $3,000 more than the purchase price from Caroline ($5,000 - $2,000 = $3,000). **Correct Answer:** - $3,000
Transcribed Image Text:**Problem Statement:** Caroline is an artist. She purchases canvas, paints, brushes, and accessories for $100. She sells one of her original paintings to an art gallery for $2,000, even though an art lover will pay the gallery $5,000 for that painting. How much value does the art gallery add? **Options:** - $5,000 - $1,900 - $4,900 - $100 - $3,000 **Solution Explanation:** 1. **Cost to Caroline:** Caroline uses $100 worth of materials. 2. **Sale to Gallery:** She sells the painting to the gallery for $2,000. 3. **Sale by Gallery:** The gallery sells the painting for $5,000. **Calculating Value Added by the Gallery:** - The gallery adds value by selling the painting for $5,000, which is $3,000 more than the purchase price from Caroline ($5,000 - $2,000 = $3,000). **Correct Answer:** - $3,000
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