Anchoring

question 123

Multiple Choice

Anchoring:

• A) can influence decision making with irrelevant information.
• B) explains why,for example,hamburger will be advertised as 80% lean rather than 20% fat.
• C) causes losses to be felt more intensely than gains.
• D) explains why,for example,firms prefer to reduce package sizes to raising prices.

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Definitions:

Long-term

Refers to an extended period of time, typically over one year, used in the context of investments, loans, or planning, indicating a focus on future benefits rather than immediate outcomes.

Maintenance

The tasks and actions taken to preserve or restore equipment, systems, or structures to an operational condition or to prevent failure.

Tax-oriented Lease

A leasing arrangement designed primarily to exploit tax advantages, often allowing the lessee to deduct lease payments as business expenses.

Financial Lease

A type of lease in which the lessee assumes both the risks and rewards of ownership of the asset, typically for its entire useful life.