Assume That You Had a Ticket for a Basketball Playoff

question 94

Multiple Choice

Assume that you had a ticket for a basketball playoff game that you bought for $50, the maximum price you were willing to pay.If a friend of yours offers to buy the ticket for $100 but you decide not to sell it, how can your decision be explained?

• A)You expect to receive greater utility from attending the playoff game than you received from buying the ticket.
• B)by the endowment effect
• C)by the law of diminishing marginal utility
• D)The income effect from the increase in the price of the ticket from $50 to $100 was greater than the substitution effect.

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Definitions:

Reinforcement

Reinforcement is a process in behavioral psychology where a behavior is strengthened by a consequence, making it more likely the behavior will be repeated.

Innate Releasing Mechanisms

Built-in neurological patterns that respond to specific stimuli, triggering an instinctive behavior in animals and humans.

Infant Behavior

The range of actions and mannerisms exhibited by newborns and babies, including ways of communicating and learning during the early stages of development.

Dorsolateral Prefrontal Cortex

The dorsolateral prefrontal cortex is a region of the prefrontal cortex involved in executive functions like working memory, cognitive flexibility, planning, inhibition, and abstract reasoning.