An Example of a Commitment Device Would Be

question 46

Multiple Choice

An example of a commitment device would be:

• A) buying yourself an ice cream after going to the gym.
• B) putting a note on the cookie jar that you want to lose weight.
• C) a swear jar that you and your friends agree must be paid $5 each time someone swears.
• D) All of these are examples of commitment devices.

---

Definitions:

Marginal Social Cost

The total cost to society of producing an additional unit of a good or service, including both private costs and externalities.

Society

A large group of individuals who live in the same area, share a common culture, norms, and values, and are organized in a cooperative manner.

Negative Production Externality

A situation in which the production of goods or services imposes costs on third parties not involved in the transaction, often not reflected in market prices.

Benefits To Consumers

The advantages or improvements in welfare, service, or product quality experienced by consumers.