What is a reference point?
A) the value of a good on the black market
B) the point from which an individual makes a consumption decision
C) a subjective valuation of a good
D) the minimum price that an individual would sell a good that she currently owns
E) none of the above

Question

Quizplus · Accepted Answer

A reference point is the point from which an individual makes a consumption decision, usually based on their current situation or previous experiences. It can be used to compare and evaluate different options, and influences the individual's perception of gains or losses. The other options presented are not accurate definitions of a reference point.

What Is a Reference Point