When Asked to Set a Price for an Item to Be

question 1

Multiple Choice

When asked to set a price for an item to be exchanged, sellers typically ask for a much higher price than buyers are willing to pay. This is referred to as the _____.

• A) attribute framing effect
• B) power effect
• C) eliminatory effect
• D) goal framing effect
• E) endowment effect

---

Definitions:

Receivable Turnover

A financial metric indicating how efficiently a company collects cash from credit sales by measuring the number of times average accounts receivable are collected over a period.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period, indicating efficiency in managing stock.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term and long-term obligations, calculated as current assets divided by current liabilities.

Acid-test Ratio

A financial metric that assesses a company's ability to cover its short-term liabilities with its most liquid assets, excluding inventory.