Read the scenario.Jake had $30 from odd jobs. He heard about a rare trading card for $25 that could complete his collection. Jake is hesitant to spend most of his savings on one item. Though he wanted it, he saved his money instead.How did loss aversion affect Jake's financial outcome?
Answer
A
It influenced him to wait for the card's price to drop.
B
It convinced him to believe the card wasn't worth the price.
C
It prompted him to keep his money instead of buying the rare card.
D
It pushed him to negotiate the price down due to what he thought it was worth.
Explanation
Loss aversion is the tendency to feel the possible loss of money more strongly than the possible gain from a purchase. Jake worried about spending most of his $30 savings on the $25 card, so he kept his money instead of buying it. Choice C correctly describes how that affected his financial outcome.
AI-written and checked against the verified answer.