The Judgment Bias That Describes the Tendency to Recall and Use

question 123

Multiple Choice

The judgment bias that describes the tendency to recall and use information easily retrieved from memory is

• A) The representativeness heuristic.
• B) The anchoring and adjustment heuristic.
• C) The availability heuristic.
• D) The framing effect.

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Definitions:

Government Bailouts

Financial support provided by a government to prevent the bankruptcy of a failing business or sector, aiming to stabilize the economy.

Coase Theorem

a principle that asserts that in the absence of transaction costs, parties can negotiate solutions to externalities among themselves, regardless of the initial allocation of property rights.

Externalities

Economic side effects or consequences of commercial activities that affect other parties without being reflected in the cost of the goods or services involved.

Adverse Selection

A situation in markets where buyers and sellers have different information, leading to transactions where one party may be disadvantaged.