Regarding the Use of Examples, Anecdotes, Single Cases, and Testimonials

question 86

Multiple Choice

Regarding the use of examples, anecdotes, single cases, and testimonials in advertising, which of the following statements is TRUE?

• A) They should be viewed as valid indicators of the authenticity of the product or service.
• B) They all create a courtesy bias within the customer.
• C) They are all potentially deceptive because individual cases tell us nothing about what is true in general.
• D) They are all invalid due to the Barnum effect.

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Definitions:

Damage Cost

The monetary cost associated with the harm done to goods in an economy, which can result from disasters, accidents, or intentional acts.

Negative Externality

An adverse effect suffered by a third party as a result of an economic transaction in which they had no involvement.

Internalize

The process of incorporating the cost of externalities into the decision-making process of firms or individuals.

Marginal Social Cost

Marginal social cost is the total cost to society of producing an additional unit of a good, including both private costs and any external costs.