A Person with Loss Aversion

question 129

Multiple Choice

A person with loss aversion:

• A)has a hard time recognizing losing investments and moving on.
• B)is likely to maximize total revenue rather than profit.
• C)is unlikely to ignore sunk costs.
• D)is more likely to use a credit card than to pay cash.

---

Definitions:

Cognitive Skills

Mental capabilities that involve processing information, understanding concepts, solving problems, and making decisions.

Inferences

The act of drawing conclusions based on evidence and reasoning rather than explicit statements.

Information Processing Theorist

An information processing theorist studies how human minds process and understand information, focusing on mechanisms like perception, memory, and problem-solving.