Some high-end retail stores that distribute mail-order catalogs will prominently offer some very high priced goods for sale (for example, a luxury sports car with gold-plated interior trim) in addition to their regular line of merchandise
Behavioral economists argue that the stores do not really plan to sell these goods, but they use these items to provide the customers with a high reference point for the prices of the other goods in the catalog. This practice is an example of: A) the ultimatim game.
B) loss aversion.
C) anchoring.
D) none of the above
C
You might also like to view...
Answer the next question based on the following demand and cost data faced by a pure monopoly.Demand DataCost DataPriceQuantity DemandedOutputTotal Cost$2.7533$4.002.50444.502.25554.752.00665.751.75777.75At equilibrium, the pure monopoly will generate_____.
A. an economic profit of $6.50 B. an economic profit of $10 C. a loss of $7.25 D. an economic profit of $4.50
Because of automatic stabilizers, disposable income varies proportionately less than real GDP during periods of economic fluctuations
a. True b. False Indicate whether the statement is true or false
Suppose that the exchange rate between the U.S. dollar and the Mexican peso starts out at $0.11 per peso. If the exchange rate then changes to $0.08 per peso, there will be a(n) __________ in the quantity demanded of dollars by Mexicans, and therefore there will be a(n) __________ in the quantity supplied of pesos to the foreign exchange market
A) decrease; decrease B) decrease; increase C) increase; decrease D) increase; increase
Suppose the MC Hammer Company produces hammers. The number of hammers it can produce each hour depends on the number of workers it hires, as shown in the accompanying table. In addition, each hammer can be sold for $2 more than the cost of the materials needed to produce it.Number of workers per hourNumber of hammers per hour00120236348456560 What is the value of the marginal product of the 2nd worker hired each hour?
A. $36 B. $16 C. $32 D. $72