Which of the Following Facts Is Not a Basis for Prospect

question 182

Multiple Choice

Which of the following facts is not a basis for prospect theory in behavioral economics?

• A)People evaluate gains and losses in relation to the status quo, not in absolute terms.
• B)People feel losses much more intensely than they feel gains.
• C)People experience diminishing marginal disutility for losses.
• D)People do not experience diminishing marginal utility for gains.

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Definitions:

Consumer Preference

The tendencies of consumers to favor certain products or services over others based on personal tastes, values, and experiences.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, stabilizing the market.

Efficiency

A measure of how well resources are used to achieve a goal, typically minimizing waste and cost while maximizing output or outcomes.

Least Possible Cost

The minimum expense required to achieve a particular economic objective.