Consider a Consumer Who Is Searching for the Lowest Price

question 102

Multiple Choice

Consider a consumer who is searching for the lowest price for good X.The consumer knows that 75 percent of the time she will find a store charging $10 and 25 percent of the times she will find a store charging $7.The expected benefit from an additional search is:

• A) $3.
• B) $0.75.
• C) $2.25.
• D) $0.

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Definitions:

Counterirritation

A method for managing pain or discomfort by intentionally inducing a second, less severe pain or irritation, to distract from the original pain.

Chronic Pain

A persistent pain that continues for weeks, months, or even years beyond the usual recovery period or occurs along with a chronic health condition.

Gate Control Theory

The proposal that pain sensations must pass through a neural “gate” in order to reach the brain and can be blocked at that gate by neurons that inhibit signals from the nociceptors.

Nocioception

The sensory nervous system's response to certain harmful or potentially harmful stimuli.