When Trying to Decide Who to Hire, Gladys, a Personnel

question 12

Multiple Choice

When trying to decide who to hire, Gladys, a personnel manager, subjectively assesses how important several traits are. She figures that, on a scale of 1-10, competence is 9, tidiness is a 6, and warmth is a 5. Using those numbers, she rates several job candidates and hires the "best" one. Which of the following best characterizes the tool Gladys used to make her decision:

• A) Expected value
• B) Expected utility
• C) Bounded rationality
• D) The availability bias
• E) Intuition

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Definitions:

Budget Line

A budget line represents all possible combinations of two goods that a consumer can purchase with a given budget, at set prices.

Labor Income

Earnings derived from work or employment, including wages, salaries, bonuses, and other compensation forms.

Tax Rate

The percentage at which an individual or corporation is taxed on their income or the valuation of goods and services.

Weak Axiom

In the context of consumer theory, the Weak Axiom of Revealed Preference (WARP) suggests that if a consumer chooses a bundle of goods A over bundle B when both are affordable, then they should not choose B when A is still affordable.