Once We Have Hit Upon a Solution That Works for Several

question 262

Multiple Choice

Once we have hit upon a solution that works for several problems, we often fail to perceive more direct solutions to similar problems. This phenomenon refers to

• A) mental set.
• B) metacognition.
• C) functional fixedness.
• D) confirmational bias.

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Definitions:

Economic Profits

The total revenue of a business minus its explicit and implicit costs; a measure of incremental gain over the total costs, including opportunity costs.

Supply Curve

A graph showing the relationship between the price of a good and the quantity supplied by producers.

Long-run Equilibrium

A state in which all factors of production and outputs are variable, allowing for the adjustment of all inputs, leading to a balanced economic condition over time.

Zero Economic Profits

Occurs when a firm earns just enough revenue to cover its total costs, including opportunity costs, but no more.