Mental Shortcuts That Reduce Complex Judgments to Simple Rules of Thumb

question 4

Multiple Choice

Mental shortcuts that reduce complex judgments to simple rules of thumb are known as ______.

• A) biases
• B) heuristics
• C) attributions
• D) fallacies

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Definitions:

Economic Profit

The difference between a firm's total revenue and its opportunity costs, including both explicit and implicit costs.

Savings Account

A deposit account held at a bank or financial institution that provides principal security and a modest interest rate.

Interest Rate

The percentage of a sum of money charged for its use, often expressed annually.

Economic Profits

The surplus gained by a firm when total revenue exceeds total costs, including both explicit and implicit costs, reflecting the financial advantage of a particular course of action.