Chris Received an Advertisement Requesting a Donation for a Program

question 2

Multiple Choice

Chris received an advertisement requesting a donation for a program to help troubled youths. He was sympathetic because his own childhood had been difficult. The ad had a line with spaces to indicate the level of contribution, with the first space showing $30, followed by $60, $100, then $500 (Gold Support) , and a final blank space to write in the contribution. Before Chris saw the level of contribution line, he thought, "I'll give $20"; after seeing the contribution line, he wrote in $25 instead on the blank space. Chris's decision to give the higher amount was MOST likely influenced by the:

• A) representativeness heuristic.
• B) availability heuristic.
• C) anchoring and adjustment heuristic.
• D) framing effect.

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Definitions:

Cable TV

A system of delivering television programming to consumers via radio frequency (RF) signals transmitted through coaxial cables or digital light pulses through fiber-optic cables.

Perfectly Inelastic

A demand situation in which the quantity demanded does not change in response to a change in price.

Tax Incidence

The analysis of the effect of a particular tax on the distribution of economic welfare among entities in the economy.

Rational Choice Theory

An economic theory that assumes individuals always make prudent and logical decisions that provide them with the highest amount of personal utility.