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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