When Howie's Old Girlfriend Used to Get Upset with Him

question 20

Multiple Choice

When Howie's old girlfriend used to get upset with him, he could smooth things over by buying flowers or chocolates for her. He keeps trying this strategy with his current girlfriend, but she gets angry with him each time. It appears that Howie has developed _______________which is interfering with the development of a new relationship strategy.

• A) a mental set
• B) an anchoring effect
• C) a prototype
• D) a goal state

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Definitions:

Majority Voting

A voting system in which decisions are made based on the majority of votes received, often used in elections and organizational decision-making processes.

Principal-Agent Problem

A scenario in which conflicts of interest arise because the goals of a principal (e.g., a shareholder) do not align with those of an agent (e.g., a company executive).

Moral Hazard Problem

The possibility that individuals or institutions will behave more recklessly after they obtain insurance or similar contracts that shift the financial burden of bad outcomes onto others. Example: A bank whose deposits are insured against losses may make riskier loans and investments.

Adverse Selection Problem

A problem arising when information known to one party to a contract or agreement is not known to the other party, causing the latter to incur major costs. Example: Individuals who have the poorest health are most likely to buy health insurance.