Alex was willing to pay $50 for the new World Cup soccer ball. When he received it as a gift, he was willing to sell it, but for no less than $80. According to behavioral economists:
A. Alex's behavior is consistent with the endowment effect.
B. Alex's behavior is irrational because of inconsistent anchoring.
C. Alex should sell the ball if he's offered any amount over $50.
D. Alex's behavior is irrational because his frame has changed.
Answer: A
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In 1935, the U.S. Patent and Trademark Office issued Parker Brothers a trademark on the
use of the name Monopoly for a board game. Hasbro bought Parker Brothers in 1991. Which of the following statements is true regarding the trademark on the name Monopoly for a board game? A) The trademark expired in 1955, 20 years after the trademark was issued to Parker Brothers. B) The original trademark expired well before Hasbro bought Parker Brothers, so they never had a trademark on Monopoly. C) Trademarks never expire, so Hasbro continues to have a trademark on the name Monopoly. D) The trademark expired in 2011, 20 years after Hasbro's purchase of Parker Brothers.
Suppose the price of gasoline and other petroleum products decline sharply. Which of the following will most likely occur as a result of the lower petroleum prices?
a. an increase in demand for solar heating systems b. an increase in demand for larger, more powerful automobiles c. an increase in demand for home insulation products d. an increase in demand for gasoline