(a). Calculate Mike's buying price for a pint of beer by writing down his reference point and solving for the price p3 such that he is indifferent between getting a pint form; and not getting or paying anything. (b). Suppose Mike unexpectedly gets a pint of beer as part of a promotion at the pub, and incorporates its consumption into his reference point in beer. Calculate his selling price by writing down his reference point and solving for the priceps that makes him indifferent between keeping his pint and receiving nothing and giving up his pint and gettingps. (c). Now suppose that after Mike gets his promo pint but before he decides whether to sell it, he notices that he lost $10 on the way to the pub. He does not yet incorporate this $10 loss into his reference point for cash . Calculate his selling price for the pint of beer . Explain intuitively why your answer is different from that in part (b). (d). Finally, suppose that the pub advertises that it will have a $1/pint promotion. Thinking that this is worth it, Mike plans to buy a pint, and incorporates this plan into his reference point .Once he arrives at the pub , Mike is told that the pub has run out of the promotional beer . What is Mike's buying price for a beer now ? [Note : for this question Mike has not lost $10 on the way to the pub.] , assume that (e). The above strategy of promising an attractive offer but then making it unavailable is an example of the "bait-and-switch" strategy in retail sales. Explain intuitively how the bait-and-switch strategy works. (f). Give a real -1ife example of a bait -and -switch strategr that you think relies at least partly on reference -dependent preferences Explain the following phenomena using prospect theory. (a). When I was returning from a conference last year, my taxi driver happily reported to me that he just found a $100 bill stuck under the seat in his cab iwhich a previous passenger must have dropped long beforeso he decided he will finish work earlier that day. (b). Some bidders enter an auction on Ebay planning to bid little for an item , but when they are the top bidder for a while and then are outbid , they end up bidding more (a type of "auction fever"). (c). When dieters break their diet for some reason, they often do so in an extreme way, for example by eating a tremendous amount or stopping to exercise altogether