Most People Make Some Decisions Based on Intuition Rather Than

question 74

Multiple Choice

Most people make some decisions based on intuition rather than calculation. This is:

• A) irrational, because intuition is often wrong.
• B) consistent with the economic model of decision-making, because calculating costs and benefits leads to decision-making pitfalls.
• C) consistent with the economic model because people intuitively compare the relative costs and benefits of the choices they face.
• D) inconsistent with the economic model, but rational because intuition takes into account non-financial considerations.

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Definitions:

Risk

The exposure to the chance of loss or damage, or the uncertainty regarding the outcome of an action or decision.

Certainty

The firm conviction that something is reliably true, without any doubt, often used in decision-making processes.

Information-Processing Style

An individual's preferred method of gathering, interpreting, and organizing information.

Market Research

The process of gathering, analyzing, and interpreting information about a market, including about its potential customers.