When consumers were given the opportunity to select a package of ground beef labeled “75% lean” or a package of ground beef labeled “25% fat,” most consumers chose “75% lean.” Why? What concept from the chapter does this illustrate?The reason is that consumers are swayed by cheap talk. Cheap talk is the concept.The reason is that consumers are much more likely to choose the alternative framed as the positive option. This is called a framing effect.The reason is that consumers infer the value of a product from positive advertising. This is called inference induction.The reason is that consumers respond better to higher numbers. They feel they are getting more because 75 is greater than 25. The concept is the endowment effect.

The fact given in this case is that when the consumers were given two different options, they…

Answered: When consumers were given the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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When consumers were given the opportunity to select a package of ground beef labeled “75% lean” or a package of ground beef labeled “25% fat,” most consumers chose “75% lean.” Why? What concept from the chapter does this illustrate?

The reason is that consumers are swayed by cheap talk. Cheap talk is the concept.
The reason is that consumers are much more likely to choose the alternative framed as the positive option. This is called a framing effect.
The reason is that consumers infer the value of a product from positive advertising. This is called inference induction.
The reason is that consumers respond better to higher numbers. They feel they are getting more because 75 is greater than 25. The concept is the endowment effect.

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