Carol's university puts a cap of $10,000 on the combined aid and scholarship money a student can receive.As a freshman,Carol had received $7,500 in combined loans and scholarships.For her sophomore year,Carol won a competitive $5,000 scholarship,and her previous aid package was reduced by $2,500.According to prospect theory,what will Carol's strongest feeling be?
A) pride in winning the $5,000 scholarship
B) happiness about the added $2,500 in her aid package
C) sadness over losing $2,500 of her previous aid package
D) happiness over having scholarship and aid money

Question

Quizplus · Accepted Answer

According to prospect theory, people tend to feel the impact of losses more strongly than gains. In this situation, Carol lost $2,500 from her previous aid package, which is more likely to elicit feelings of sadness or disappointment rather than happiness or pride in winning the scholarship or receiving additional aid. Therefore, option C is the best choice.

Carol's University Puts a Cap of $10,000 on the Combined