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:

Households

Economic units that consist of all individuals who live together in one dwelling, making joint decisions about consumption and labor.

Circular Flow Model

An economic model illustrating the continuous movement of money, goods and services, and factors of production between producers and consumers in an economy.

Interdependence

Interdependence is a condition where entities are mutually reliant on each other, implying that actions of one can significantly impact the others.

Businesses

Economic entities (firms) that purchase resources and provide goods and services to the economy.