Question

Walking to class one day, Lars finds a $5 bill lying on the sidewalk. If Lars is subject to the habit of mental accounting, how is he MOST likely to respond?

Answer 1

Answer:

Larry would probably take the money and ponder whether or not he should spend it or save it, and why.

Explanation:

Mental accounting refers to the various valuations that a person assigns to the same quantity of money depending on subjective criteria, which might have negative consequences. The term "mental accounting" is used to explain how humans classify, categorize, and assess economic outcomes. In practically every financial choice we make, mental accounting is at work. It causes us to cognitively divide money.