Two Groups of Participants Are Asked to Estimate How Much

question 139

Multiple Choice

Two groups of participants are asked to estimate how much a piece of art is worth. Before giving their actual estimates, Group A is first asked if they think the art is worth more or less than $10, while Group B is asked if they think the art is worth more or less than $150. According to the anchoring heuristic, what would be the MOST likely result on average?

• A) Group A estimates the art is worth more than what Group B estimates.
• B) Group B estimates the art is worth more than what Group A estimates.
• C) There is no significant difference between the estimates given by Group A and Group B.
• D) Anchoring has no impact on the estimates provided by either group.

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Definitions:

Cost Of Goods Sold

An accounting term representing the direct costs attributable to the production of goods sold by a company, including materials and labor.

Fixed Manufacturing Overhead

Costs in manufacturing that do not vary with the level of production, such as rent, depreciation, and salaries.

Inventories

Assets held for sale in the ordinary course of business, in the process of production for such sale, or in the form of materials to be consumed in the production process.

Deferred

Refers to expenses or income that has been incurred but not yet recognized in the accounts, to be recognized in a future period.