An Important Category of Bias in Human Decision Making Is

question 22

Multiple Choice

An important category of bias in human decision making is:

• A)temptation.
• B)limiting processing power.
• C)reluctance to change.
• D)All of these are important sources of bias in decision making.

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Definitions:

Consumer Surplus

The discrepancy between what consumers are prepared and able to spend on a product or service and the actual amount they end up paying.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, serving as an indicator of producer welfare.

Direct Price Discrimination

A pricing strategy where a business charges different prices to different customers for the same product or service, based on willingness to pay.

Arbitrage

A means to defeat a price discrimination scheme; it occurs when low-value individuals are able to resell their lower-priced goods to the higher-value group.