You Are Given a Candle, a Box of Matches, a Few

question 51

Multiple Choice

You are given a candle, a box of matches, a few thumbtacks, and a very short piece of string with the instruction to mount the candle on a wall. It never occurs to you that you could empty the matchbox and tack it to the wall as a platform for the candle because of

• A) the framing effect.
• B) the sunk cost effect.
• C) functional fixedness.
• D) an algorithmic dysfunction.

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Definitions:

Shifts

Refers to changes in the position of demand or supply curves in economic models, often due to changes in external factors such as technology, preferences, or policy.

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity of that good or service that consumers are willing and able to purchase at various prices.

Price of Substitutes

The cost of alternative goods or services that consumers can purchase instead of the original item, influencing consumer choices and demand.

Supply Curve

represents the relationship between the price of a good or service and the quantity of it that suppliers are willing to produce and sell at that price.