In Using the Representativeness Heuristic,participants

question 41

Multiple Choice

In using the representativeness heuristic,participants

• A)extrapolate from a sample of evidence if the category is homogeneous but not if the category is heterogeneous.
• B)are sensitive to the sample size and draw conclusions more readily from a large sample.
• C)seem to assume that all instances of the category resemble the prototype for that category.
• D)rely on base rates.

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Definitions:

Total Surplus

The combined measure of consumer surplus and producer surplus in a market, representing the total benefits to society from the production and consumption of goods and services.

Equilibrium

A state where market supply and demand balance each other, and as a result, prices become stable.

Pumpkin Market

The economic environment or system where pumpkins are bought, sold, or traded.

Equilibrium Price

The cost at which the amount of a product available matches the amount of the product sought after.