Mark Values His Drum Set at $800 and Ella Values

question 110

Multiple Choice

Mark values his drum set at $800 and Ella values her guitar at $1,000. Suppose that Mark trades his drum set for Ella's guitar.

• A) This trade makes Ella worse off by $200.
• B) This trade makes Mark better off by $200.
• C) Mark must value Ella's guitar for at least $1,000, and Ella must value Mark's drum set for at least $800.
• D) This trade creates value by moving the guitar and drum set to people who value them more.

Distinguish between different relations within the balance theory.

Understand the development of attitudes through vertical and horizontal structures.

Analyze the structures of attitudes and their influence on attitude change.

Recognize the use of persuasive techniques, such as low-balling, in attitude change.

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Definitions:

Monopolistic Competition

A market structure characterized by many firms offering products that are similar but not identical, allowing for competition based on quality, price, and marketing.

Ease Of Entry

Refers to the absence of barriers for new competitors to enter an industry or market.

Profit Maximizing

The process by which a firm determines the price and output level that returns the greatest profit.

Firm Charges

Fees or prices levied by a company for its services or products.