According to the "Law of Parsimony

question 14

Multiple Choice

According to the "law of parsimony,"

• A) a good theory generates a large number of hypotheses.
• B) the best theory is the one that explains a phenomenon with the fewest constructs.
• C) hypotheses are generated from theories.
• D) theories should require as few studies as possible to support them.

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Definitions:

Stockholders

Individuals or entities that own shares in a corporation, giving them proportionate ownership depending on the amount of stock held.

Utility Function

A mathematical representation that ranks consumer preferences or satisfaction levels from consuming various goods or services.

Wealth

The total value of all financial and non-financial assets owned by an individual or entity, minus any debts owed.

Diminishing Marginal Utility

A principle stating that as a person increases consumption of a product, there is a decline in the added satisfaction that comes from consuming one additional unit.