Suppose Yasmin Buys a New House and Calls the Utility

question 5

Multiple Choice

Suppose Yasmin buys a new house and calls the utility company to turn on the electricity. Yasmin is assigned an energy provider that produces electricity from burning coal. She is allowed to choose a different provider that uses clean energy sources at a later date. Yasmin is likely to _______ based on the influence of _______.

• A)switch to a new provider; loss aversion
• B)switch to a new provider; the endowment effect
• C)stick with the assigned provider; the commitment effect
• D)stick with the assigned provider; status quo bias

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Definitions:

Intern

is an individual, often a student or recent graduate, working temporarily in a job to gain work experience or meet requirements for a qualification.

Venture Capitalist

An investor who provides capital to startup ventures or supports small companies that wish to expand but do not have access to equities markets.

Franchisor

Firm whose products are sold to customers by the franchisee.

Franchisee

Individual or business firm purchasing a franchise.