Someone Tells You That If You Say "Abracadabra" Every Morning

question 89

Multiple Choice

Someone tells you that if you say "abracadabra" every morning you will stay healthy. You say it daily, and, sure enough, you stay healthy. You conclude that saying this magic word really does ensure health. What error in thinking have you made?

• A) failure to use the availability heuristic
• B) inappropriate use of categorization-by-levels
• C) over-reliance on base-rate information
• D) premature commitment to one hypothesis

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Definitions:

Stock Split

A stock split occurs when a company divides its existing shares into multiple ones to boost liquidity without changing the overall market value of shareholders' equity.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor necessary to create the product.

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding direct labor, raw materials, or production costs.

Sales Revenue

Income received from selling goods or services before any costs or expenses are deducted.