Psychologists Have Published an Article Which Shows That Many U

question 9

Multiple Choice

Psychologists have published an article which shows that many U.S. residents avoided flying in airplanes after the 2001 terrorist attacks. In fact, for several months afterwards, many people decided to drive, rather than fly. This phenomenon can best be explained by

• A) the influence of recency on availability.
• B) the conjunction fallacy.
• C) the illusory correlation effect.
• D) too much emphasis on the likelihood ratio.

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Definitions:

Price Taker

An economic term referring to a company or an individual that cannot control the market price of its product and must accept the prevailing market price.

Total Revenue

The aggregate revenue a corporation generates from sales or services in a given time frame.

Economic Profits

The profit a company makes after accounting for both the explicit costs of production and the opportunity costs of capital.

Long Run

A period in which all factors of production and costs are variable, typically allowing for full adjustment to changes.