If Asked, "Which Is More Probable? A

question 268

Multiple Choice

If asked, "Which is more probable? A.Snowboarder Shaun White will not be in the lead after the first run of a halfpipe competition but will win the competition, or B.Snowboarder Shaun White will not be in the lead after the first run of a halfpipe competition." Most people would answer A, although A is less likely to be true than B.According to Tversky and Kahneman, such faulty conclusions are based on

• A) the framing effect.
• B) convergent thinking.
• C) divergent thinking.
• D) the representativeness heuristic.

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Definitions:

Segmented Income Statement

An income statement that separates financial information into segments, such as departments or products, to analyze each segment's profitability.

Absorption Costing

Absorption costing is an accounting method allocating all manufacturing costs to the product, including fixed and variable costs.

Net Operating Income

A financial metric that calculates a company's profit after subtracting operating expenses but before interest and taxes.

Single Product

A business strategy or market condition where a company focuses on and sells only one product.