The Mistaken Belief That the Probability of a Conjunction of Two

question 26

Multiple Choice

The mistaken belief that the probability of a conjunction of two events is greater than the probability of one of them is called what?

• A) Conjunction fallacy
• B) Framing effect
• C) Loss aversion
• D) Omission bias
• E) Sunk-cost effect

---

Definitions:

Contribution Margin

The amount of revenue from sales that exceeds variable costs, indicating how much contributes to covering fixed costs and generating profit.

Fixed Costs

Expenses that do not change with the level of production or sales activity, such as rent and salaries.

Traceable Fixed Expense

Fixed expenses that can be directly linked to a specific department, project, or segment within a company.

Net Operating Income

A calculation of a firm's profit, determined by deducting operational costs from the income gained through business activities.