Which of the Following Statements Is True of Economic Reasoning

question 28

Multiple Choice

Which of the following statements is true of economic reasoning?

• A) Economic reasoning hampers optimal decision making.
• B) Economic reasoning can only be used with normative choices.
• C) Economic reasoning implies that leisure time is free and costless.
• D) Economic reasoning helps people make the best use of scarce resources.

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Definitions:

Complexity-Extremity Effect

A psychological phenomenon where the complexity of a situation influences the extremity of individuals' judgments or perceptions.

Halo Effect

A cognitive bias in which an observer's overall impression of a person, company, brand, or product influences their feelings and thoughts about that entity's character or properties.

Primacy

The principle that the first items presented in a series are more likely to be remembered than those that follow.

Recency

The principle that the most recently presented items or experiences are likely to be remembered best.