Specialty shops can charge and get customers to pay higher prices for identical goods than they would pay in "big box" stores. Assuming that these differences are driven by store appearance rather than differences in services provided, which of the
following best explains this phenomenon?
A. Availability heuristics.
B. Framing effects.
C. Confirmation biases.
D. Self-serving biases.
Answer: B
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Assuming no change in the nominal exchange rate, how will a higher rate of inflation in the United States relative to France affect the real exchange rate between the two countries? (Assume the United States is the "domestic" country.)
A) The real exchange rate will rise. B) The real exchange rate will be unaffected. C) The real exchange rate will fall. D) The impact on the real exchange rate cannot be predicted.
The most important role of the World Trade Organization is
(a) to promote market oriented economic policies. (b) to settle trade disputes. (c) to provide development assistance. (d) to help countries choose the appropriate level of a tariff or quota.
If the economy were producing at point E and moved to point D,
A. the unemployment rate would increase.
B. the unemployment rate would decrease.
C. the production possibilities would shift outward.
D. the economy would shift resources from producing butter to increasing the production of guns.
A monopsonist faces an upward-sloping labor supply curve. This means that his marginal expenditures on labor are
A) greater than the wage. B) equal to the wage plus the increase in the wage resulting from hiring one more unit of labor hired. C) greater than the wage because hiring more workers requires to pay all workers more. D) All of the above.