Given the Emphasis on the Status Quo by Prospect Theory

question 17

Multiple Choice

Given the emphasis on the status quo by prospect theory, which of the following is most likely true?

• A)In international trade, actors may find it easier to agree on how to share the losses than on how to distribute the gains from trade.
• B)In international trade, actors may find it easier to come to a trade agreement in which both sides equally gain.
• C)In international trade, actors may find it easier to agree on how to distribute the benefits from a trade agreement than on how to share the losses.
• D)In international trade, actors may find it easier to walk away from a trade deal when it is clearly not in their favor.

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Definitions:

Habituation

The process by which an organism reduces its response to a repeated stimulus over time, not due to fatigue or sensory adaptation.

Short-Term Memory

The ability to keep a limited amount of data in a state of readiness and easy access for a brief duration.

Dishabituation

The process of responding to an old stimulus as if it were new again, following the presentation of a new stimulus that interrupts the process of habituation.

Habituate

To become accustomed to something through repeated exposure, often leading to decreased responsiveness.