To Say That a Change in Taste Causes Prices to Rise

question 47

Multiple Choice

To say that a change in taste causes prices to rise is to claim that

• A)transfer prices are a more accurate gauge of economic activity than market prices.
• B)prices are a signal.
• C)the economy has full information.
• D)prices would not change if people did not know the exact reason for the price change.
• E)price changes cannot be predicted.

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Definitions:

Social Desirability

The behavior of those answering questions to do so in a manner they assume will generate favorable opinions from others.

Distinctiveness

A principle suggesting that an event or object is memorable or noticeable because it differs significantly from other events or objects.

Consistency

The principle of maintaining the same attitudes, beliefs, and behaviors over time, which contributes to the predictability and stability of one's actions.

Neuroticism

A personality trait characterized by a long-term tendency to be in a negative emotional state, including feelings of anxiety, depression, and emotional instability.