Mia Recently Bought a Kayak for $700 That She Values

question 41

Multiple Choice

Mia recently bought a kayak for $700 that she values at $1,000. Mia's friend, Sofia, offered to buy the kayak from her for $1,000, but Mia turned her down. Mia is most likely encountering _____.

• A) sunk cost fallacy
• B) time inconsistency
• C) falling prey to framing effects, particularly anchoring
• D) the endowment effect

Understand the factors that shift the aggregate supply curves in the short run and long run.

Describe the impact of resource price flexibility on economic equilibrium.

Assess the implications of actual output deviating from potential output.

Understand the role of aggregate demand in determining the long-run price level and output.

---

Definitions:

Finished Goods

Products that have completed the manufacturing process but have not yet been sold to customers.

LIFO Inventory Method

An inventory valuation method that assumes the last items placed in inventory are the first sold during an accounting period; stands for Last-In, First-Out.

Inventory Costing Methods

Techniques used to assign costs to inventory items, such as First-In, First-Out (FIFO), Last-In, First-Out (LIFO), and weighted average cost.