Why do many film processing companies have a policy of printing every picture on a roll of film or a memory card, even if the picture is very fuzzy and customers are allowed to ask for refunds on any pictures they do not like?
What will be an ideal response?
The processing companies are taking advantage of the tendency of consumers to ignore nonmonetary costs. They are relying on the fact that passing up a refund once the picture has already been paid for is a nonmonetary opportunity cost rather than a direct monetary cost, and as a rule, customers rarely do ask for refunds.
You might also like to view...
When evaluating whether or not to make an investment, one should focus on the ________ because doing so takes into account anticipated inflation.
A. exchange rate B. real interest rate C. junk bond rate D. nominal interest rate
When an economy is operating at its full employment rate of output:
A. the rate of unemployment will be zero. B. output will exceed the economy's maximum sustainable rate. C. the actual rate of unemployment will equal the natural rate. D. the economy's potential rate of output will exceed actual GDP.
An inflationary output gap is defined to be when the current level of output is:
A. high enough to cause an unexpected amount of inflation. B. below full employment GDP. C. above full employment GDP. D. equivalent to full employment GDP.
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.