Rosa received a corgi pillow as a raffle prize; she would have been willing to pay $18 to buy it herself. Based on the endowment effect, we would expect Rosa to be willing to sell the pillow Multiple Choice O O under no circumstances whatsoever. for some amount less than $18. for the $18 she would have been willing to pay for the pillow. only if she is offered more than $18.

Rosa received a corgi pillow as a raffle prize; she would have been willing to pay $18 to buy it herself. Based on the endowment effect, we would expect Rosa to be willing to sell the pillow Multiple Choice O O under no circumstances whatsoever. for some amount less than $18. for the $18 she would have been willing to pay for the pillow. only if she is offered more than $18.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Bleecker Street runs from A to B, as shown in the diagram. The lone convenience store currently in operation along this street is at A. An entrepreneur who wants to open another store in the neighborhood is weighing a choice between the only two available locations, C and D. If customers, who are uniformly distributed along Bleecker Street, always shop at the store nearest to where they live, which of the locations C or D would be optimal from the perspective of customers and why? A C D B O Location D because that would minimize the average travel time for customers. O Location D because that would mean each store would get an equal share of the market. O Location C because that would give the new entrepreneur higher profits. O Locations C and D would be equally attractive because consumers have no reason to care about the relative profitability of different entrepreneurs.
On January 1st, 2022 every economics major at NYU had to choose one of the following two options: (a) take $10 today, (b) forgo $10 today, and get $15 on December 31st, 2022. Suppose John Doe, chose option (a), and picked up $10 on January 1st. Use this information to solve for John’s minimum discount rate. (Recall, r is the discount rate and (1 + r) is the discount factor.) Given the information above, what do we know about the discount rate of Jane Doe if she chose option (b)?
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Multiple Choice O O O O D. C. B. E.
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