Assume That You Had a Ticket for a Basketball Playoff

question 94

Multiple Choice

Assume that you had a ticket for a basketball playoff game that you bought for $50, the maximum price you were willing to pay.If a friend of yours offers to buy the ticket for $100 but you decide not to sell it, how can your decision be explained?

• A)You expect to receive greater utility from attending the playoff game than you received from buying the ticket.
• B)by the endowment effect
• C)by the law of diminishing marginal utility
• D)The income effect from the increase in the price of the ticket from $50 to $100 was greater than the substitution effect.

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Definitions:

Realistic Anxiety

A form of anxiety that arises from an actual threat or danger in the environment.

Abnormal

Deviating from what is considered normal or typical, often used in the context of behavior or psychological phenomena.

Actual Danger

A real and present threat or risk that can cause harm or damage.

Social Phobia

A chronic mental health condition in which social interactions cause irrational anxiety and fear.