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18 May, 20:17

People are more likely to purchase a consumer ratings magazine that reviews new automobiles before buying a new car than they are to purchase a consumer ratings magazine that reviews pens and pencils before buying a new pen or pencil. Which of the following best explains this behavior? A. Because the consumer ratings magazine must have a higher price for the issue reviewing pens and pencils.

B. Because the value of the information, in terms of avoiding a mistake on the purchase, is much higher for an automobile than for a pen or pencil, it is more worthwhile to gather this information.

C. Because people generally do not know which products are reviewed by these consumer magazines.

D. None of the above explain this behavior.

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  1. 18 May, 22:30
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    B. Because the value of the information, in terms of avoiding a mistake on the purchase, is much higher for an automobile than for a pen or pencil, it is more worthwhile to gather this information.

    Explanation:

    Due to amount that can be lost when a mistake is made on buying an automobile, people are more careful in gathering information about automobiles before purchase. This is not so when purchasing a pen or pencil as the amount involved is low.

    It is natural to be more cautious when spending on big ticket items such as houses and cars, because of the big loss that can be incurred on such purchases.
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