Author Question: Loss aversion refers to the idea that: A) people generally tend to avoid risky activities. B) ... (Read 90 times)

renzo156 · **on:** Jun 29, 2018

Loss aversion refers to the idea that:

A) people generally tend to avoid risky activities.
B) people are more prone to making losses than gains in day-to-day transactions.
C) people psychologically weight a loss more heavily than they psychologically weight a gain.
D) people are unwilling to undertake expenditures that reduce the probability of future losses.

Question 2

Explain why a relative price is an opportunity cost.

What will be an ideal response?

cegalasso · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

C

Answer to Question 2

A relative price is the ratio of the price of one good or service to the price of another good or service. It tells us how much of one good or service must be given up in order to obtain more of the other good.