Suppose That Jake and Abby Each Win $1,000 in a State

question 201

Multiple Choice

Suppose that Jake and Abby each win $1,000 in a state lottery.Jake spends his winnings on a new television.Abby saves her winnings for a "rainy day." Which of the following is correct?

• A) Both Jake and Abby's behaviors suggest that they base their purchasing decisions on transitory income.
• B) Jake's behavior suggests that he bases his purchasing decisions on transitory income rather than permanent income.Abby's behavior suggest that she bases her purchasing decisions on permanent income rather than transitory income.
• C) Jake's behavior suggests that he bases his purchasing decisions on permanent income rather than transitory income.Abby's behavior suggests that she bases her purchasing decisions on transitory income rather than permanent income.
• D) Both Jake and Abby's behaviors suggest that they base their purchasing decisions on permanent income.

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Definitions:

Short-term Memory

The part of the memory system where small amounts of information can be stored for a brief period of time.

Information-processing Theorists

Researchers who study how human beings take in, utilize, store, and retrieve information, emphasizing the mental processes involved in cognitive development.

Theory Construction

is the process of developing a systematic framework of concepts and propositions intended to explain specific phenomena or guide research and practice.

Theory Theory

The Theory Theory is the idea that children attempt to understand the world by forming and testing theories about physical, biological, and social phenomena in a manner similar to scientists.