People Tend to Be More Alert and Responsive to Evidence

question 28

Multiple Choice

People tend to be more alert and responsive to evidence that supports their preexisting notions and beliefs than to evidence that challenges them.This effect is called

• A)confirmation bias.
• B)stereotypy.
• C)base-rate error.
• D)the covariation law.

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Definitions:

Innovate

The process of creating new ideas, products, or methods, often resulting in improved efficiency, effectiveness, or competitive advantage.

Economic Profits

The surplus remaining after subtracting total costs from total revenues, including both explicit and implicit costs.

Creative Destruction

A concept in economics that refers to the process by which new innovations lead to the demise of old technologies and economic structures, driving economic growth through renewal.

Joseph Schumpeter

Joseph Schumpeter was a 20th-century economist known for his theories on business cycles, innovation, and the concept of "creative destruction."