Suppose that Ike is loss averse. In the morning, Ike’s stockbroker calls to tell him that he has gained $1000 on his stock portf
olio. In the evening, his accountant calls to tell him that he owes an extra $1000 in taxes. At the end of the day, does Ike feel emotionally neutral since the dollar value of the gain in his stock portfolio exactly offsets the amount of extra taxes he has to pay? Explain.
Since Ike is loss averse, the loss will be felt by him than the gain. The principle of loss aversion is prominent in the domain of economics, and people with loss aversion always prefer to avoid losses than to acquire equivalent gain.
This means that the increase in taxes of $1,000 that Ike experienced, will make him to have a very high disutility than the $1,000 gain from his stock portfolio.
As a loss averse Ike is, the $1,000 loss as a result of the tax have impact in 2.5times more than the $1,000 gain if we're to be handled theoretically.
<span>Federal Trade Commission were formed for those very purpose.
</span><span>Federal Trade Commission is an independent agency that established in united states. The purpose of this organization is to ensure customer protection from dishonest practices and eliminate various illegal business strategies to create a fairer competitive environment.</span>
A. Best Food's competitive position in the segment
Explanation:
Best Food's competitive position in the segment is an example of the criterion used to select target market segments.
It would be used by the management to evaluate and analyze potential new geographic market segments in order to know whether new equipment must be bought to serve each new segment.
Additivity simply means that the values of an objective function and total resources used can be found by adding all the contributions made by the objective functions and the decision variables of all resources used. That is, it assumes that the overall of an objective function is found by adding the contribution of each objective function to the overall. In additivity, interaction between variables doesnt exist.
