When Decision Makers Fail to Adjust Adequately for Information Because

question 28

Multiple Choice

When decision makers fail to adjust adequately for information because they fixate on initial information they received, they are influenced by ________.

• A)sunk costs error
• B)hindsight bias
• C)availability bias
• D)anchoring bias
• E)selective perception bias

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Definitions:

Utility Maximization

A principle in economics that suggests individuals or firms seek to allocate their resources in a way that maximizes their satisfaction or utility.

Marginal Utility

The additional satisfaction or benefit a consumer receives from consuming an additional unit of a good or service.

Demand Curve

is a graphical representation that shows the relationship between the price of a good and the quantity of that good that consumers are willing to purchase.

Utility Maximization

The economic principle that individuals seek to obtain the greatest satisfaction or utility from their choices given their resources.