Suppose You See Mary Do Very Poorly on a Classroom

question 34

Multiple Choice

Suppose you see Mary do very poorly on a classroom test. From this you conclude that Mary not only is stupid but also has few friends, a poor personality, a difficult family life, and a hard time in everything she does. You have committed an error called:

• A) the primacy effect
• B) the context effect
• C) the halo effect
• D) the attitude heuristic

Evaluate external business offers considering capacity, incremental costs, and potential strategic implications.

Understand the effects of government licensing and monopoly power on market efficiency and consumer choice.

Recognize the challenges regulators face due to lack of information when imposing price regulation on monopolies.

Comprehend the incentives and behaviors of monopolists regarding efficiency, resource allocation, and pricing.

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Definitions:

Wheeler-Lea Act

The federal law of 1938 that amended the Federal Trade Commission Act by prohibiting unfair and deceptive acts or practices of commerce (such as false and misleading advertising and the misrepresentation of products).

Antitrust Laws

Legislation designed to promote competition and prevent monopolies and other practices that restrain trade.

Department of Justice

A federal executive department of the U.S. government responsible for the enforcement of laws and administration of justice.

Celler-Kefauver Act

A United States antitrust law passed in 1950 to prohibit certain mergers and acquisitions that could lead to a decrease in competition.