Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host.Since she does not know much about wine,she will likely use the price of the wines as
A) an indicator of quality.
B) a reflection of status quo pricing.
C) an indicator of the variety.
D) a measure of scarcity.
E) a measure of the income effect.

Question

Quizplus · Accepted Answer

Margaret, who does not know much about wine, is likely to use price as an indicator of quality. This is a common heuristic for making decisions about wine when one is not an expert. However, it is important to note that price is not always a reliable indicator of quality, as there are many factors that can influence the cost of a bottle of wine, including marketing, packaging, and production costs.

Margaret Has Been Invited to a Fancy Dinner Party and Wants