Thea Committed a Traffic Violation That Resulted in an Accident

question 233

Multiple Choice

Thea committed a traffic violation that resulted in an accident. She learns first that the violation will result in a $500 fine; she then learns that she will have to pay another $500 for damage caused in the accident. According to prospect theory,

• A)she will suffer as much disutility from paying for the accident damage as she does from paying the fine.
• B)she will suffer less disutility from paying for the accident damage than from paying the fine.
• C)she will suffer more disutility from paying for the accident damage than from paying the fine.
• D)she will feel less disutility from paying $1,000 than she would receive positive utility from receiving $1,000.

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