When People Use the Representativeness Heuristic to Estimate Probabilities for Events

question 107

Multiple Choice

When people use the representativeness heuristic to estimate probabilities for events, they base their estimates on:

• A)the ease with which examples can be brought to mind
• B)the similarity between the event in question and their prototype
• C)the difference between the event in question and their starting estimate
• D)mathematical calculations of the expected value

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Definitions:

Accounts Payable

Accounts payable are liabilities of a business that represent its obligations to pay off a short-term debt to its creditors or suppliers.

Service Revenue

The income earned by a company for the services it has provided to its customers.

Normal Starting Balance

Normal Starting Balance refers to the initial amount of money in an account at the beginning of a financial period.

Debit Postings

Entries made on the left side of an account, increasing the balance of assets and expenses or decreasing liabilities and equity.