1. At recruitment events and calls, LuLaRoe executives allegedly claimed consultants would make "60 to 75 thousand dollars a year working 20 hours a week." In reality, a majority of Washington consultants reported less than $10,000 profits in total from their LuLaRoe business, and nearly one-third of consultants reported losses. The statements executives allegedly made about high profits are examples of:

A. Deceptive claims and information asymmetry

B. Halo effect and realistic goals

C. Monopoly and confirmation bias

D. Loss adversion and inventory loading

2. From 2014 to 2017, LuLaRoe gave bonuses to their sales consultants based on:

Group of answer choices

A. Only the inventory their recruitments purchased

B. Only the inventory the sales consultant purchased

C. The inventory the sales consultant purchased AND also on the inventory her recruitments purchased

D. The inventory the sales consultant sold AND also on the inventory her recruitments sold

3. After 2017, LuLaRoe changed their bonus structure and gave bonuses to their sales consultants based on:

Group of answer choices

The inventory the sales consultant sold AND also on the inventory her recruitments sold

Only the inventory the sales consultant purchased

The inventory the sales consultant purchased AND also on the inventory their recruitments purchased

Only the inventory their recruitments purchased

4. This sudden change in the bonus structure affected many sales consultants. Their profits dropped drastically. This sudden loss of income for sales consultants could be an example of:

Group of answer choices

Injury resulted

Moral hazard

Price fixing

Loss adversion

5. According to the article, LuLaRoe "packaged highly sought-after, limited-edition styles in pods, requiring consultants to buy large quantities of potentially unprofitable clothing to get one profitable style...these practices ensured that the company and its top consultants continued to profit from sales, even if most consultants were struggling to sell merchandise to consumers." This is an example of:

Group of answer choices

Confirmation bias

Inventory loading

Moral hazard

Rent seeking

6. LuLaRoe stated it had a 100% refund policy for unsold merchandise. Five months later, the company changed this policy, affecting many sales consultants who purchased their inventory when they 100% refund policy was in place. This is an example of:

Group of answer choices

Moral hazard

Inventory loading

Misrepresentation

Confirmation bias