Faulty Decision Making That Is the Result of a Highly

question 111

Multiple Choice

Faulty decision making that is the result of a highly cohesive group striving for agreement to the point of avoiding inconsistent information is known as _____.

• A)the risky shift
• B)group polarization
• C)groupthink
• D)destructive conformity

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Definitions:

Pretax Income

Income earned by an entity before any taxes have been deducted.

Operating Leverage

The degree to which a firm or project can increase operating income by increasing revenue, reflecting the fixed versus variable cost structure.

Clockworks Co.

A hypothetical or generic name that could be used to refer to a company specializing in mechanical devices, especially those involving gears and timekeeping mechanisms.

Contribution Margin Ratio

The ratio that indicates the percentage of each sale that exceeds the variable costs, calculated by subtracting variable costs from sales revenue and dividing by sales revenue.