Melissa Is an Attractive Woman Who Lives in Ottawa and Loves

question 161

Multiple Choice

Melissa is an attractive woman who lives in Ottawa and loves hockey.When asked to predict if it were probable that she was a schoolteacher or a season ticket holder for the Ottawa Senators,most people selected the latter,even though there are more schoolteachers than there are season ticket holders in Ottawa.This is an illustration of:

• A)hindsight bias.
• B)the representativeness heuristic.
• C)base-rate decision making.
• D)the sunk-cost fallacy.

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Definitions:

Net Realizable Value

The estimated selling price in the ordinary course of business, minus any costs of completion, disposal, and transportation.

Inventory Figure

The total value of a company's merchandise, raw materials, and finished and unfinished products which have not yet been sold.

Financial Position

Financial position is the status of a person's or entity's assets, liabilities, and equity at a given point in time, providing a snapshot of financial health.