The Endowment Effect Suggests That That People

question 41

Multiple Choice

The endowment effect suggests that that people

• A) have a strong attachment to their entitlement, regardless of whether they paid to acquire them.
• B) have a strong sense of fairness.
• C) are concerned about the welfare of others.
• D) act in ways to distort market prices.

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Definitions:

Creditor

A creditor is an entity (person or institution) that lends money or extends credit to another entity, expecting to be repaid in the future.

Sole Proprietor

An individual who owns and operates a business alone, bearing full responsibility for its debts and obligations.

Profitable

Describes a situation, project, or enterprise that results in financial gain or benefit.

Management Consulting

A professional service that provides expertise and advice to businesses seeking to improve their operations, strategy, and performance.