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Keith Just Got an Iphone 5 for His Birthday,and He

Question 77
Multiple Choice

Keith just got an iPhone 5 for his birthday,and he quickly switches his data over and throws his iPhone 4 in a drawer and forgets about it.Economists would say this behavior is ___________ and would use the concept of ________________ to explain this choice. A) rational; the implicit cost of ownership B) irrational; the implicit cost of ownership C) irrational; ignoring sunk costs D) rational; considering sunk costs

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Q 78
Grace just got her first cell phone,an iPhone,for graduation.She tosses her iTouch in a drawer and never touches it again,even though she could easily sell it for $75 on Craigslist.Grace's choice is ___________ because ________________. A) rational; she weighs the $200 she paid for the iTouch and the $75 she could sell it for now B) irrational; she weighs the $200 she paid for the iTouch and the $75 she could sell it for now C) rational; she would not pay $75 to buy the iTouch today D) irrational; she would not pay $75 to buy the iTouch today
Q 79
Paul wins a $500 watch in a sweepstakes and decides to keep it,even though he says he would have preferred to win $500 cash.Knowing Paul's preferences,how can we explain his decision to keep it? A) Paul has a cognitive bias, and it leads him to value the watch more because he owns it. B) Paul has a cognitive bias; he is ignoring a nonmonetary opportunity cost of already owning the watch. C) Paul's implicit cost of ownership makes him feel as though he should keep the watch. D) All of these are true.
Q 80
The implicit cost of ownership: A) is a cognitive bias. B) is an unproven concept. C) is the monetary opportunity cost that is often overlooked. D) All of these are true.
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