Suppose You Hear About a Friend Who Graduated from College

question 21

Multiple Choice

Suppose you hear about a friend who graduated from college in dramatic arts.Suppose you also judge her to be more likely to be both selling insurance and active in community theater than she is to be only selling insurance.You have

• A)fallen victim to the anchoring and adjustment heuristic.
• B)fallen prey to a conjunction fallacy.
• C)ignored regression to the mean.
• D)committed a belief bias error.

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Definitions:

Average Total Cost

The total cost of production divided by the total quantity produced, representing the per-unit cost of production.

Marginal Cost

Refers to the increase in total production costs resulting from the production of one additional unit of a good or service.

Single-Price

A pricing strategy where a product is sold at the same price to all customers under similar conditions.

Pure Monopoly

A market structure where a single firm is the sole provider of a product or service, without close substitutes, giving it significant control over pricing.