The Price of a First-Class Stamp in 1957 Was 3

question 276

Multiple Choice

The price of a first-class stamp in 1957 was 3 cents, and it is 47 cents in 2016. From this we know that

• A) both the relative and the absolute price of first-class stamps increased from 1957 to 2016.
• B) the money price of first-class stamps increased from 1957 to 2016 but the absolute price of first-class stamps stayed constant.
• C) the money price of first-class stamps increased from 1957 to 2016 and the relative price of first-class stamps decreased.
• D) the money price of first-class stamps increased from 1957 to 2016, but we can't tell if the relative price of first-class stamps increased or decreased without more information.

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Definitions:

Loss Aversion

Oversensitivity to loss, leading to an unwillingness to recognize a loss and move on.

Mental Accounting

The habit of mentally assigning dollars to different accounts so that some dollars are worth more than others.

Overconfidence

The phenomenon where an individual's subjective confidence in their judgments is reliably greater than their objective accuracy.

Irrational Decisions

Choices made by individuals that contradict the best outcome from a rational point of view, often influenced by biases or lack of information.