James Was Walking near a Dog Park When He Saw

question 7

Multiple Choice

James was walking near a dog park when he saw what he thought was a rather large, short, oddly colored dog being walked on a leash. It took him a moment to realize that he was not looking at a dog but at a pot-bellied pig. James has fallen prey to the ________.

• A) probability heuristic
• B) representativeness heuristic
• C) confirmation heuristic
• D) convergence heuristic

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Definitions:

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit of a product.

Break-even Point

The level of production or sales at which total revenues equal total expenses, and the business makes neither a profit nor a loss.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit, indicating how much each unit sold contributes to covering fixed costs and generating profit.

Break-even Point

The point at which total costs and total revenue are equal, meaning that there is no net loss or gain, and the business is not making a profit.