Linda Committed a Traffic Violation That Resulted in an Accident

question 106

Multiple Choice

Linda committed a traffic violation that resulted in an accident.She learns first that the violation will result in a $500 fine;she then learns that she will have to pay another $500 for damage caused in the accident.According to prospect theory,

• A) she will suffer as much disutility from paying for the accident damage as she does from paying the fine.
• B) she will suffer less disutility from paying for the accident damage than from paying the fine.
• C) she will suffer more disutility from paying for the accident damage than from paying the fine.
• D) she will feel less disutility from paying $1,000 than she would receive positive utility from receiving $1,000.

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Definitions:

Agent Duties

Responsibilities of an agent to act in the best interest of the principal, including duties of loyalty, care, and to disclose material information.

Contract Remedies

Legal solutions available to a party under a contract when the other party fails to perform as promised.

Tort Remedies

Legal solutions or compensations available to individuals who have suffered harm due to another's wrongful actions.

Agents

Individuals or entities authorized to act on behalf of another person or entity, known as the principal, in legal or business matters.