1.Consider the college that has two prices for its services. It charges list price (full tuition) to only a small portion of their students. Everyone else gets a discount (scholarship). This college does not set a low price and charge a tuition premium to those few individuals who are not star students, athletes, or from low-income backgrounds. (a) In terms of perceived gains and losses, describe how the recipient of a scholarship is likely to perceive the price he or she pays for college. (b) Using what you know about the value of perceived gains and losses, explain why the college prefers to frame its two prices in terms of scholarships rather than tuition premiums.

2.How might consumers differ in their motivation to carry out price information search? How are these differences likely to affect price-level awareness?

3.Americans elect a President every 4 years. We would like to know if the vote share of the incumbent U.S. president is associated with the growth in income over the previous 4 years. Y = "incumbent party vote share" variable is the percentage of Democrat and Republican votes that went to the incumbent President. X = the percentage change in income over the previous 4 years. The data are from US Presidential elections from 1948 to 2012. The fitted regression results are the following: Y = 45.9 + 2.3X. What is the correct interpretation of the slope coefficient, b2?

• A. A 1 percentage point change in the vote share causes a 2.3 percentage point change in Income?
• B. The incumbent party's vote increased by 2.3 percentage points for every 1 percentage point increase in income.
• C. A 2.3 percent change in income is associated with a 1 percent change in vote share.
• D. None of these answers are correct