A Person Who Is,all Else Equal,more Willing to Throw Away

question 37

Multiple Choice

A person who is,all else equal,more willing to throw away a $20 shirt than a $200 shirt,even if both are worn out,is:

• A) dynamically inconsistent.
• B) dynamically consistent.
• C) demonstrating sunk cost fallacy.
• D) demonstrating pre-commitment.

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Definitions:

Benefits-Received Principle

The idea that those who receive the benefits of goods and services provided by government should pay the taxes required to finance them.

Limited And Bundled Choices

Marketing strategies that restrict consumer options or package multiple products and services together.

Paradox Of Voting

The paradox of voting refers to the situation where individual rationality leads to a collective irrational outcome, such as when individuals decide not to vote because they believe their vote will not influence the outcome of an election, potentially leading to an outcome not preferred by the majority.

Rent-Seeking Behavior

Rent-seeking behavior involves seeking to increase one's share of existing wealth without creating new wealth, often through manipulating the social or political environment in which economic activities occur.