What Is the Endowment Effect

question 302

Multiple Choice

What is the endowment effect?

• A)the tendency of people to be unwilling to sell something they already own even if they are offered a price that is greater than what they would be willing to pay to buy the good if they did not already own it
• B)the tendency of people to be unwilling to sell something they already own because of its sentimental value
• C)the tendency of people to overstate the value of a good they already own even though similar items can be purchased at a lower price
• D)the sum total of assets that a person has acquired over the years

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Definitions:

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A financial arrangement where profits are divided among participants, typically in a business venture or partnership.

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The process or action of advancing students from one grade or level to the next based on achieving certain academic standards and criteria.