If someone asked you to predict the price of gas in a month, and you decided to guess by adding a few cents to the current price of gas, your answer would exhibit: A)anchoring. B)time inconsistency. C)rational expectations. D)transitivity.

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Quizplus · Accepted Answer

Anchoring refers to the cognitive bias where an individual relies too heavily on an initial piece of information (the "anchor") when making decisions. In this scenario, using the current price of gas as a starting point and then adjusting it slightly to predict future prices is a classic example of anchoring.

If Someone Asked You to Predict the Price of Gas