Suppose a Person Prefers $100 Today to $150 One Year

question 36

Multiple Choice

Suppose a person prefers $100 today to $150 one year from now but prefers $150 in seven years to $100 in six years. This is an example of ____.

• A) sunk cost fallacy
• B) time inconsistency
• C) falling prey to framing effects
• D) overconfidence

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Definitions:

Enzymes

Biological catalysts that speed up chemical reactions in cells without being consumed in the process.

Enthalpy

Enthalpy is a measurement of the total heat content of a system, reflecting the energy needed to create a system and the energy needed to make room for it by displacing its environment.

Entropy

A measure of the disorder or randomness in a system, often associated with the second law of thermodynamics.

Free Energy

A thermodynamic quantity representing the amount of energy in a system that is available to do work.