The Theory That Provides a System to Analyze a Problem

question 23

Multiple Choice

The theory that provides a system to analyze a problem to determine the best approach for making a decision is called:

• A)Normative Decision Making
• B)Nominal Group Technique
• C)Situational Leadership Theory
• D)Delphi Method
• E)Group Polarization

Describe the conditions under which an economy's production possibilities frontier is also its consumption possibilities frontier.

Calculate the opportunity cost of producing different goods.

Analyze the gains from trade between individuals or nations using the production possibilities frontier.

Understand the implications of trading at a constant opportunity cost.

---

Definitions:

Representativeness Bias

A cognitive bias where individuals make judgments about the probability of an event based on how much it resembles their existing stereotypes.

Escalating Commitment

The phenomenon where people increase their investment or involvement in a decision or action despite facing negative feedback or outcomes.

Confirmation Error

A cognitive bias that involves focusing on information or evidence that confirms pre-existing beliefs or hypotheses, while ignoring contradictory data.

Strategic Opportunism

The practice of seizing strategic opportunities in a timely and efficient manner, often with flexibility and readiness to adapt.