A Manager Might Insist That Separating a Decision into Multiple

question 47

Multiple Choice

A manager might insist that separating a decision into multiple parts will guarantee that the decisions made will turn out well.This allows for an assessment of the project at each stage,lessening the likelihood the project will fall prey to which of the following?

• A) incremental investment
• B) illusion of control
• C) escalation of commitment
• D) paralysis by analysis

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Definitions:

Marginal Returns

The change in output resulting from a one-unit increase in a particular input, while holding other inputs constant.

Marginal Cost

The rise in overall expenses associated with the production of an extra unit of a product or service.

Average Total Cost

The total cost of production divided by the number of units produced, giving a per unit cost of production.

Marginal Cost

The expense associated with creating an extra unit of a product or service.