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Roger Overhears Loud Voices in the Apartment Next Door and Immediately

question 76

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Roger overhears loud voices in the apartment next door and immediately assumes that his neighbors are engaged in a domestic battle. He then talks on the phone with his friend Lamont and learns that his friend had a very bad day: Lamont lost his job AND discovered a large dent in his car. Roger jumps to some quick conclusions. "Someone is trying to attack you," he advises Lamont. "They dented your car on purpose. It is probably no accident that you lost your job this week either; someone there is out to get you!" Roger's quick assumptions about others' intentions indicate a ____.


Definitions:

WARP

WARP, or the Weak Axiom of Revealed Preference, is a consistency criterion for consumer choice behavior, suggesting that if a consumer prefers bundle A over bundle B when both are affordable, they should not choose B when A is still affordable.

Bundle

A collection of items or services grouped together as a single package.

Laspeyres Price Index

A price index calculated by taking the ratio of the total cost of purchasing a specified set of goods and services at current prices to the total cost of purchasing the same set of goods and services at base period prices, using base period quantities as weights.

Per Capita Income

The average income earned per person in a given area or country, calculated by dividing the total income by the population size.

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