A Decision Bias Is an Inherent Tendency That Leads to Incorrect

question 125

Multiple Choice

A decision bias is an inherent tendency that leads to incorrect decisions. An example of a decision bias is failure to:

• A) Consider all relevant costs.
• B) Properly identify sunk costs as irrelevant.
• C) Consider opportunity costs.
• D) Adjust for the time value of money.
• E) Consider legal constraints associated with the pricing decision.

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Definitions:

Random Number Intervals

A sequence of intervals generated by a random process, often used in simulations and statistical sampling.

Probability Distribution

A mathematical function that provides the probabilities of occurrence of different possible outcomes for an experiment.

Cumulative Probability Distribution

A function that shows the probability that a random variable is less than or equal to a certain value.

Random Number Intervals

Ranges within which random numbers can fall, often used in simulations and statistical sampling.