Early Studies of Group Decision-Making Demonstrated That Groups Made Riskier

question 81

Multiple Choice

Early studies of group decision-making demonstrated that groups made riskier decisions than individuals do.The concept of "risky shift" was born.Later studies,however,revealed that group decisions are not necessarily more risky than individual decisions; instead,they are more extreme.The concept of _______ was born.

• A) decisional instability
• B) group polarization
• C) culture-value theory
• D) social loafing
• E) extremity shift

---

Definitions:

Production Function

An equation that describes the maximum amount of output that can be derived from a set number of inputs.

Diminishing Marginal Product

The principle that says the marginal product of a factor of production decreases as the quantity of the factor is increased, holding all else constant.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of production and the cost per unit of production decrease.

Average Total Cost

The total cost of production divided by the number of units produced, representing the per-unit cost of production.