Byron Has Been Watching His New Neighbour for a Week

question 174

Multiple Choice

Byron has been watching his new neighbour for a week. She drives a sporty car, carries a cell phone, and wears nothing but blue business suits. Byron decides his new neighbour must be a lawyer. What did Byron use to form an opinion about his new neighbour's occupation?

• A)hindsight bias
• B)base-rate fallacy
• C)representativeness heuristic
• D)availability heuristic

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Definitions:

Fixed Assets

Long-term tangible assets used in the operation of a business, such as buildings, machinery, and equipment, not easily converted into cash.

Source of Cash

Any activity or operation within a business that generates cash inflow.

Inventory Acquisition

The process of obtaining and adding goods or materials to a company's stock for further sale or use.

Cash Increase

An uptick in the amount of liquid assets (cash and cash equivalents) that a company or individual has on hand.