The Availability Heuristic Can Cause People to Incorrectly Assess the Probabilities

question 169

Multiple Choice

The availability heuristic can cause people to incorrectly assess the probabilities of various events because:

• A) the most available event is not always the most frequent
• B) the most likely event is not always the most frequent
• C) it is too difficult to compute joint probabilities of events
• D) it is too difficult to distinguish between probabilities and likelihoods

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Definitions:

Maximum Capacity

The highest level of output that a company can sustain to produce in a given period under normal operating conditions.

Dividend

Revenue shared by a company with its shareholders, often as a disbursement of profits.

Financial Planning

The process of creating and managing a strategic plan for a person's or organization's financial affairs.