Use the Following to Answer Question

question 7

Multiple Choice

Use the following to answer question:
Table 10.2
-(Table 10.2) Suppose that Honda prices the Pilot 4WD LX at $30,000 and the Pilot 4WD Touring at $40,000. Are these prices incentive-compatible?

• A) No, the less price-sensitive consumer receives more consumer surplus from the LX version.
• B) Yes, each consumer type receives the highest consumer surplus from buying the car designed for its group.
• C) No, the highly price-sensitive consumer receives more consumer surplus from the LX version.
• D) Yes, each consumer type receives the lowest consumer surplus from buying the car designed for its group.

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Definitions:

Adolescence

The phase of growth both mentally and physically that typically happens from puberty until reaching the age of majority.

Psychoanalytic Theory

The theory proposed by Freud that suggests that unconscious forces act to determine personality and behavior.

Gender Attitudes

The beliefs and expectations about the roles, behaviors, and activities deemed appropriate for men and women in a society.

Same-Sex Playmates

Refers to children who prefer to engage in play activities with peers of the same gender.