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:

Credit Availability

Refers to the ease with which individuals or businesses can obtain loans or credit from financial institutions.

Durable Goods

are items with a long life expectancy, such as automobiles, furniture, and appliances, typically used over years rather than consumed quickly.

Disposable Income

The accessible funds for households intended for saving and spending, after subtracting taxes on income.

Induced Consumption

Consumption that varies directly with income, indicating how consumer spending increases as income rises.