According to Tversky and Kahneman, When an Initial Intuitive Assessment

question 57

Multiple Choice

According to Tversky and Kahneman, when an initial intuitive assessment of a situation is not modified or overridden by a more deliberative analysis,

• A) the intuitive system always produces inaccurate judgments.
• B) important factors may be ignored and our judgments may be systematically biased.
• C) more efficient and accurate information processing occurs.
• D) the rational system takes over to produce accurate judgments.

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Definitions:

Contribution Margin

The difference between sales revenue and variable costs of a product or service, indicating how much contributes to covering fixed costs and generating profit.

Direct Manufacturing Cost

Expenses directly tied to the production of goods, including materials and labor costs.

Indirect Manufacturing Costs

Expenses related to the production process that cannot be directly traced to individual products, such as utilities or salaries for management.

Contribution Margin

The amount by which a product's sales revenue exceeds its total variable costs, indicating how much contributes to covering fixed costs and generating profit.