Joseph Gallo Poured Two Glasses of Wine from the Same

question 107

Multiple Choice

Joseph Gallo poured two glasses of wine from the same bottle but put a more expensive price tag on one glass than on the other. He let people test both and asked which they wanted; most wanted the more expensive glass, not knowing that both had come from the same bottle. This kind of experiment tells us that:

• A) preferences are given and are not shaped by society.
• B) decision making is costless.
• C) people probably want to drink wine for the sense of indulgence it gives them rather than for the taste.
• D) people never make rational choices.

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Definitions:

Sample Variance

The measure of variation or spread within a sample set of data, calculated by averaging the squared deviations from the sample mean.

Population Variance

A measure of the dispersion of a set of data points in a population from their mean value, representing how spread out the population values are.

Unbiased Estimator

A statistical estimator whose expected value equals the true value of the parameter it estimates.

Sample Mean

The arithmetic average of a set of sample values, used as an estimate of the population mean.