When Deciding Between Playing a Lottery with an 80% Chance

question 4

Multiple Choice

When deciding between playing a lottery with an 80% chance of winning $4,000 or receiving $3,000 outright,most people choose the _____ because of the _____.

• A)lottery;preference for variable rewards
• B)lottery;rational choice theory
• C)$3,000;sunk-cost fallacy
• D)$3,000;certainty effect

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Definitions:

Adjust Revenue

The act of modifying the reported amount of revenue to more accurately reflect the earnings of a period, following certain accounting principles and standards.

Reported

Refers to information or data that has been officially announced or presented.

Matching Principle

An accounting principle that states expenses should be recognized in the same period as the revenue they helped generate.

Recorded

The act of entering financial transactions or information into accounting records.