On the first day of school, Jackie notices many of her classmates are wearing Converse sneakers. Ever the fashionista, this will likely affect:
A) Jackie's income, as she will now buy Converse sneakers and will have less to spend on other goods.
B) Jackie's preferences for Converse sneakers, since she feels as though she needs them now.
C) Jackie's expectations of future prices, since the price of Converse sneakers will likely increase due to their popularity.
D) the prices of related goods, since other sneakers will be less popular and thus their prices will decrease.

Question

Quizplus · Accepted Answer

Jackie's observation of her classmates wearing Converse sneakers is likely to affect her preferences for Converse sneakers, as she may feel pressure to conform to her peers and prioritize having the same trendy shoes. This is a common phenomenon known as "peer effects" in consumer behavior, where an individual's choices and preferences are influenced by the choices of those around them. However, it is not necessarily the case that she will have to spend more money on sneakers or that the price of Converse sneakers will increase due to their popularity. The prices of related goods may be affected as well, but this is not directly related to Jackie's personal preferences.

On the First Day of School, Jackie Notices Many of Her