Which of the Following Cognitive Biases Occurs When Decision Makers

question 19

Multiple Choice

Which of the following cognitive biases occurs when decision makers allocate even more resources to a project if they receive feedback that the project is failing?

• A)Prior hypothesis bias
• B)Reasoning by analogy
• C)Illusion of control
• D)Escalating commitment
• E)Representativeness

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Contribution Margin

The difference between sales revenue and variable costs, representing the amount that contributes towards covering fixed costs and generating profit.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, used in financial analysis and grading.

Fixed Expenses

Recurring costs that do not fluctuate with the level of production or sales volume, such as lease payments or salaries.