Question 1

Ulrich bought an investment property that he intended to rent to tourists on the beach.After six months,he had had only one rental for far less than the cost he had hoped to charge.His wife encouraged him to sell the home,but he insisted that it will be profitable if they don't give up and keep trying to rent it.Ulrich's unwillingness to sell the home and cut his losses is an example of the______________effect.

Accepted Answer

The answer of Ulrich bought an investment property that he...

Question 2

Vince buys tickets to a concert that his girlfriend,Jennifer,wants to see.The concert is in three months,but two______________weeks before the show,the couple split up.Vince decides to go to the concert anyway even though he doesn't really like the band."I paid the money,so I might as well go," he says.Vince's decision demonstrates the______________principle.

Accepted Answer

Vince's decision to attend the concert despite not liking the band is an example of the sunk cost principle, where individuals continue an endeavor due to previously invested resources (time, money, effort) rather than current benefits.

Question 3

Name two factors that affect both supervisor ratings of employees and employee self-ratings.

Accepted Answer

The answer of Name two factors that affect both supervisor...

Question 4

One difficulty that homeowners often run into when they attempt to sell is that they tend to value their own property much higher than do other people,including real estate agents and potential buyers.This tendency is consistent with the

Accepted Answer

The endowment effect refers to the idea that people tend to overvalue objects, including property, simply because they own them. Homeowners can become emotionally attached to their homes and may have a hard time separating their personal attachment from the actual market value of the property. This can lead to them putting a higher price tag on their home than what is realistic, and can make it difficult to sell.

Question 5

Compare and contrast men and women in terms of style and effectiveness as leaders.

Accepted Answer

The answer of Compare and contrast men and women in...

Question 6

______________James has just purchased a stock for $50 a share,and in the first two days it rises to $60 a share.James decides that this 20% gain in 48 hours is a nice little windfall,and sells the stocks at that price.The fact that it next goes up to $80 a share in the following month leaves James wondering why he sold.This tendency to sell a stock too quickly after its value has increased is called the______________effect.

Accepted Answer

The disposition effect refers to the tendency of investors to sell assets that have increased in value while keeping assets that have dropped in value.

Question 7

Describe two factors that can reduce the validity of the traditional interview.

Accepted Answer

The answer of Describe two factors that can reduce the...

Question 8

The tendency for people to persist in failing investments to avert loss,which causes losses to mount,is known as the

Accepted Answer

The escalation effect refers to the tendency to continue investing in a failing project or decision to avoid acknowledging a loss, leading to increased losses.

Question 9

How do rewards affect intrinsic motivation?

Accepted Answer

The answer of How do rewards affect intrinsic motivation?...

Question 10

Explain the basic premise of equity theory as it applies to the workplace.What are two steps that a person experiencing distress within this model might take to reduce their discomfort? Give an example of how this might play out in a real workplace situation.

Accepted Answer

The answer of Explain the basic premise of equity theory...

Question 11

The behavior of the second highest bidder in Tiger's (1980)dollar auction demonstrates

Accepted Answer

The second highest bidder in the dollar auction often continues to bid to avoid losing their initial investment, demonstrating the escalation of commitment to a counterproductive endeavor despite the sunk cost fallacy.

Question 12

______________The tendency for people to sell stocks that have risen too early and hold stocks that have declined for too long is called the

Accepted Answer

The disposition effect refers to the tendency of investors to sell assets that have increased in value while holding onto assets that have decreased in value, often due to emotional biases.

Question 13

People who violate the sunk cost principle often

Accepted Answer

People who violate the sunk cost principle continue to invest in a failing course of action to justify their initial commitment, despite evidence that it may not be beneficial.

Question 14

Less than 30 minutes into the four-hour film,Sanford could tell he was going to hate the movie.He considered____________________________getting up and walking out but felt compelled to sit through the whole movie because he had already spent his money on the ticket.This illustrates

Accepted Answer

The sunk cost principle refers to the idea that past investments (like money spent on a movie ticket) should not affect current decision-making. Sanford felt compelled to stay because he had already spent money, illustrating this principle.

Question 15

When a person applies for a job and is granted an interview,they are naturally motivated to present themselves as favorably as possible.How might this lead to intentional or even unintentional "faking"? What forms might this faking take?

Accepted Answer

The answer of When a person applies for a job...

Question 16

Lamont has a 42-inch high definition television that he purchased for $1200 six months ago.He's decided to replace____________________________it with a larger 60-inch television,and tries to sell the smaller one for $1100.He finds that nobody will buy it,and tells prospective buyers "it is almost brand now and I'm selling it for less than it cost when I bought it!" Lamont fails to recognize that the same televisions can now be purchased for $800,and he is inflating the value of his television just because he owns it.This is called the

Accepted Answer

The endowment effect refers to the phenomenon where people ascribe more value to things merely because they own them, which is what Lamont is experiencing by overvaluing his television.

Question 17

Explain how investors are influenced by attributions about fluctuations in the stock market.

Accepted Answer

The answer of Explain how investors are influenced by attributions...

Question 18

The economic rule of thumb that only future costs and benefits,not past commitments,should be considered in making a decision is the

Accepted Answer

The economic principle that only future costs and benefits should be considered in making a decision is known as the sunk cost principle. This means that past investments or commitments, or sunk costs, should not be taken into consideration when deciding whether to continue with a project or investment. The reasoning behind this principle is that the past costs cannot be recovered, so they should not influence current decision-making.

Quiz 13: Business