Our Tendency to Judge the Likelihood of an Event on the Basis

question 27

Multiple Choice

Our tendency to judge the likelihood of an event on the basis of how readily we can remember instances of its occurrence is called the

• A)confirmation bias.
• B)representativeness heuristic.
• C)availability heuristic.
• D)belief perseverance phenomenon.

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Definitions:

Deadweight Loss

A reduction in economic efficiency that happens when the balance for a product or service cannot be reached or is impossible to achieve.

Profit-maximizing Monopoly Pricing

Profit-maximizing monopoly pricing is a strategy where a monopolist sets a price at the highest possible level that does not allow new entrants, maximizing its profit.

Marginal Revenue

The additional income that is generated by increasing product sales by one unit.

Marginal Cost

The cost incurred by producing one more unit of a good or service.