Asked by Pradnya S. Ghode on Jun 28, 2024
Verified
Buying a warranty on a new television is an example of paying to avoid risk.
Buying A Warranty
The act of purchasing a guarantee, typically from a manufacturer, that a product will be repaired or replaced if it fails within a certain period of time.
Avoid Risk
The strategy of making decisions that minimize the possibility of experiencing negative outcomes.
- Absorb information concerning the tendencies of risk-averse individuals and their strategies for risk management.
- Identify how warranties and insurance policies can affect consumer utility and economic outcomes.
Verified Answer
AI
Angelique IrakozeJul 05, 2024
Final Answer :
True
Explanation :
By purchasing a warranty, the buyer is paying for protection against the risk of the television breaking down or encountering other issues.
Learning Objectives
- Absorb information concerning the tendencies of risk-averse individuals and their strategies for risk management.
- Identify how warranties and insurance policies can affect consumer utility and economic outcomes.
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