According to Prospect Theory, Would a Person Rather Gamble $2

question 136

Multiple Choice

According to prospect theory, would a person rather gamble $2.00 with the possibility of winning $4.00, or gamble 50 cents with the possibility of winning $1.00? Why?

• A) $2.00 because they could possibly win a greater amount of money
• B) $2.00 because they will ignore the possibility of losing more money
• C) 50 cents because they can only lose a small amount of money
• D) 50 cents because they will not mind only being able to win a little money

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Definitions:

Long-Term Relationships

Engagements or associations between parties, whether personal or professional, that are built over an extended period and emphasize loyalty, commitment, and mutual benefit.

Market

A group of people who have a need, purchasing power, and the desire and authority to spend money on goods, services, and ideas.