Laureano Has a Strong Preference for Honda Over All Other

question 48

Multiple Choice

Laureano has a strong preference for Honda over all other car brands.When it came time to buy a new car,however,there was a promotion that offered a very small discount on Nissans and Laureano elected to buy a Nissan,even though he likes Hondas a lot better.What is the most likely reason why Laureano would experience dissonance in the wake of this behavior (buying the Nissan instead of a Honda) ?

• A) This behavior was based on introspection.
• B) This behavior was not freely chosen.
• C) This behavior has long-term negative consequences.
• D) There was insufficient justification for this behavior.

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Definitions:

Constant Returns to Scale

A situation in which output increases by the same proportion as inputs when the scale of production is changed.

Long-run Average Total Cost

The average total cost when all factors of production are variable and economies of scale are fully exploited, indicating the lowest possible cost per unit.

Economies of Scale

Economies of scale refer to the cost advantage that arises with an increased output of a product, as fixed costs are spread out over more units of production, leading to a decrease in the per-unit cost.

Diseconomies of Scale

The phenomenon where production costs increase as a firm's production scale becomes too large, leading to inefficiencies.