Consider the Following Scenario to Answer the Questions That Follow

question 97

Multiple Choice

Consider the following scenario to answer the questions that follow.
Suppose a large electronics retailer has 1,000 salespeople who sell new computers and new computer service plans. The retailer is interested in increasing the percentage of customers who purchase a computer service plan (or warranty) with their new computers. The retailer decides to test two sales pitches by splitting its salespeople into two groups of 500 and giving each group a slightly different sales pitch to recite to customers prior to the consummation of a computer sale.
The first group of salespeople recites the following sales pitch: "Before you pay, I wanted to let you know that all of our new computers come automatically with a warranty that adds $150 to the purchase price. If you wish to opt out and decline the warranty, all you need to do is fill out and sign a form attesting to your refusal."
The second group of salespeople recites the following sales pitch: "Before you pay, I wanted to let you know that, although none of our new computers come automatically with a warranty, you can purchase one by adding $150 to the purchase price. If you wish to opt in and accept the warranty, all you need to do is fill out and sign a form attesting to your acceptance."
-Suppose that 34% of customers hearing the sales pitch from the first group purchased the warranty and that 34% of the customers hearing the sales pitch from the second group purchased the warranty.The managers concluded that ________ were not present,so it did not matter how the question about purchasing the warranty was asked.

• A) rational effects
• B) electronic aptitude effects
• C) concerns about fairness
• D) framing effects
• E) fairness effects

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Definitions:

Spending Variance

The difference between the actual amount of money spent and the budgeted amount, often analyzed in cost management.

Customers Served

The total number of customers who receive service or goods from a company within a specified period.

Fixed and Variable Cost

Costs that remain constant regardless of the level of production or sales (fixed) and costs that change in proportion to the level of production or sales (variable).

Total Expenses

The sum of all costs and expenses incurred by a business, including cost of goods sold and operational expenses.