Fred Just Purchased an Expensive New Refrigerator and Is Considering

question 168

Multiple Choice

Fred just purchased an expensive new refrigerator and is considering purchasing the overpriced warranty. In making his decision on the warranty, Fred ignores better ways that his money could be spent, including paying off high-interest credit card debt. According to prospect theory, the process that leads Fred to ignore the debt and buy the overpriced warranty is

• A)framing bias.
• B)anchoring.
• C)mental accounting.
• D)confirmation bias.

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Definitions:

Product Mix

The total range of products or services that a company offers to its customers, encompassing various product lines, categories, and items.

Beauty And Grooming

Products and practices aimed at enhancing or maintaining one's outward appearance and personal hygiene.

Household Care

Products and services designed to maintain cleanliness, hygiene, and functionality within a home environment.

Continuous Innovation

An ongoing process of making incremental improvements to products, services, or processes to maintain competitiveness.