In Making Category Judgments, We Are Often Sensitive to the Degree

question 10

Multiple Choice

In making category judgments, we are often sensitive to the degree of variability within the target category. This fact is easily explained by:

• A) exemplar-based theories but not by prototype theory
• B) prototype theory but not by exemplar-based theories
• C) neither prototype theory nor exemplar-based theories
• D) both prototype theory and exemplar-based theories

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Definitions:

Financial Break-Even

The point at which total revenues are equal to total fixed and variable costs, resulting in a net income of zero.

Soft Rationing

Internal limitations set by a company on the amount of funds allocated for new investments or projects.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, demonstrating the proportion of fixed versus variable costs a company has.

Fixed Costs

Expenses that remain constant regardless of how much is produced or sold, including rent, salaries, and insurance costs.