A Consumer Tells Another Consumer, "Every Time I Eat at Big

question 133

Multiple Choice

A consumer tells another consumer, "Every time I eat at Big Bill's Steakhouse, I get poor service." Whether this is true or not, it is the consumer's perception. This is an example of consumers basing future predictions on the quickness and ease with which a particular example of an outcome comes to mind. This scenario would be an illustration of the ________ heuristic.

• A) discrimination
• B) differentiation
• C) availability
• D) screening
• E) representativeness

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Definitions:

After-tax Earnings

The net income a company generates after all taxes have been deducted from total revenue.

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity which is used to finance its overall operations and growth.

Residual Dividend Policy

A strategy where dividends are paid after all project capital needs and working capital requirements are met.

Dividend Payout Ratio

The percentage of net income paid to shareholders in the form of dividends.