What Problem Does One Face When Using the Representativeness Heuristic

question 111

Multiple Choice

What problem does one face when using the representativeness heuristic?

• A)it is counter to the use of inductive reasoning.
• B)one is not using past information that may be useful.
• C)judgments based on similarity are generally unfounded.
• D)it may cause one to ignore other types of relevant information.

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Definitions:

Operating Cycle

The duration of time from the acquisition of goods for inventory to the sale of the goods and the collection of payment.

Inventory Turnover

A measure of how quickly a company sells and replaces its stock of goods during a certain period, indicating efficiency in managing inventory.

Receivables Turnover

A measure of a company's efficiency in collecting its sales on credit, calculated by dividing sales by average accounts receivable.

Payables Turnover

A financial ratio that measures how quickly a company pays its suppliers by comparing net credit purchases with the average accounts payable over a period.