Managers Who Exhibit Bounded Rationality

question 162

Multiple Choice

Managers who exhibit bounded rationality

• A)might be operating under time constraints.
• B)might be factoring political considerations into decisions.
• C)might be limited in their capacity to acquire and process information.
• D)might be subject to cognitive biases.
• E)All of the above

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Definitions:

Maintenance Cost

Expenses incurred to keep property, equipment, or assets in effective operating condition.

Machine Hour

A measure of production time, representing the time a machine is operated to perform work.

High-low Method

A technique used in managerial accounting to estimate fixed and variable costs based on the highest and lowest levels of activity.

Variable Cost

Costs that change in proportion to the activity or business volume, such as materials and labor directly involved in production.