Which of the Following Defines or Describes Mental Accounting

question 103

Multiple Choice

Which of the following defines or describes mental accounting?

• A) The act of owning a good increases its value, so the owner must be paid more to give up the good than she would have been willing to pay for it in the first place.
• B) It is a way to frame a bias in which people treat their current and future assets as separable, nontransferable accounts; for example, having mental savings accounts for entertainment, retirement, and other expenditures.
• C) It is the mistake of allowing costs that cannot be recovered to affect decisions.
• D) It is the act of placing too much emphasis on the immediate present than even the near future when making decisions.

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Definitions:

Line Structure

A simplified drawing that represents a molecule's structure with lines representing bonds between atoms and excludes showing hydrogen atoms bonded to carbon.

Benzene

A colorless, flammable, ring-shaped hydrocarbon with the formula C6H6, known for its role in organic chemistry as a building block for more complex molecules.

Cyclohexane

A colorless, flammable liquid with a distinctive detergent-like smell, commonly used as an organic solvent and a precursor to nylon.

Aromatic

Relates to organic compounds that contain one or more benzene rings or similar ring structures, characterized by a distinct smell and stability.