Tony Notes That an Electronics Store Is Offering a Flat

question 56

Multiple Choice

Tony notes that an electronics store is offering a flat $20 off all prices in the store. Tony reasons that if he wants to buy something with a price of $50, then it is a good offer, but if he wants to buy something with a price of $500, then it is not a good offer. This is an example of:

• A)inconsistent reasoning; saving $20 is saving $20.
• B)the proper application of the Cost-Benefit Principle.
• C)rational choice because saving 40% is better than saving 4%.
• D)inconsistent reasoning because prices are sunk costs.

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Definitions:

Credit Limit

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The perception of an organization held by its stakeholders, shaped by its actions, communications, and reputation.

Testimonials

Written or spoken statements extolling the virtue of a product, service, or individual, often used for marketing purposes.

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