Which of the Following Is NOT an Example of the Anchoring

question 11

Multiple Choice

Which of the following is NOT an example of the anchoring effect (i.e., choices are affected by spurious information) ?

• A) The French and British governments completed construction of the Concorde because they had so much money tied up in research and development that would have been wasted if the project were cancelled.
• B) People are reluctant to sell stock they have received as a gift even if they would not have chosen to purchase the stock.
• C) Investors purchase shares of a stock on plausible rumors of increased future earnings.
• D) Investors liquidate common stock and hold cash because they fear that the stock market will fall because the American League won the World Series.
• E) a. and c. are correct.

---

Definitions:

Supply

The total amount of a specific good or service that is available to consumers at a given time.

Equilibrium Quantity

The quantity of goods or services at which demand equals supply, and there is no tendency for the market price to change.

Equilibrium Price

The price at which the quantity of a good demanded equals the quantity supplied, leading to a stable market condition.

Demand

The amount of a product or service that buyers are ready and capable of buying at different price points.