People Sometimes Form a Stereotype About Members of a Certain

question 167

Multiple Choice

People sometimes form a stereotype about members of a certain group because they remember a few people who fit the stereotype and forget those who do not fit it. Reasoning of this type is an example of the

• A) Stroop effect.
• B) use of algorithms.
• C) availability heuristic.
• D) use of base-rate information.

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Definitions:

Excludability

The characteristic of a private good, for which the seller can keep nonbuyers from obtaining the good.

Private Good

A good, or service that is individually consumed and that can be profitably provided by privately owned firms because they can exclude nonpayers from receiving the benefits.

Quantity Demanded

The quantity of a product or service that buyers are prepared and financially able to buy at a certain price.

Efficiency Loss

The loss of economic efficiency that can occur when equilibrium for a good or service is not achieved, leading to potential welfare or opportunity costs.