Answer the following statement true (T) or false (F)
1) The presence of framing effects influences how sellers present their products to consumers.
2) Prospect theory and the work of behavioral economists confirm that consumers are
economically rational.
3) People feel losses about 2.5 more intensely than they feel gains.
4) Firms would rather shrink package sizes than raise prices because consumers will feel less of
a loss from the change in package size.
1) T
2) F
3) T
4) T
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A persistent shortage or surplus of a currency under the Bretton Woods system was evidence of
A) failure to support the existing fixed exchange rate by central banks. B) speculation against the currency by speculators in world exchange markets. C) fundamental disequilibrium in the country's exchange rate. D) all of the above
A profit-maximizing monopsonist will hire workers up to the point at which
A) W = MRP. B) MRP = MFC. C) W = MFC. D) W = MRP = MFC.