The Behavior of the Second Highest Bidder in Teger's (1980)dollar

question 78

Multiple Choice

The behavior of the second highest bidder in Teger's (1980) dollar auction demonstrates

• A) effective use of the sunk cost principle.
• B) that people do not handle money as carefully as professionals do.
• C) escalation of a counterproductive endeavor.
• D) the fact that people take greater risks when gains are at stake.

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Definitions:

Closing Entries

Entries recorded at the close of an accounting period for the purpose of moving balances from temporary to permanent accounts.

Capital Account

An account showing the net worth of a business at a specific point in time, including assets contributed by owners and profits.

Balance Sheet

A financial statement that displays a company's assets, liabilities, and equity at a specific point in time.

Permanent Accounts

Accounts that carry their ending balances from one accounting period to the next, including assets, liabilities, and equity accounts.