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Jacquie Has Just Lost $100 on a Bet with a Friend

Question 16

Multiple Choice

Jacquie has just lost $100 on a bet with a friend. The friend offers her a double-or-nothing deal, which would result in either her winning back her $100 and having no loss or losing a total of $200. The alternative would simply be to accept her already certain loss of $100. According to the principle of diminishing marginal utility, Jacquie will be more likely to


A) bet again in the hopes of wiping out her earlier $100 loss.
B) bet again so that she can save face in front of her friend.
C) decline to bet and simply accept her $100 loss.
D) decline to bet again but make plans for how she will get back at her friend.

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