Rupert, Who Leads the Design Team in an Automobile Firm

question 70

Multiple Choice

Rupert, who leads the design team in an automobile firm, decides not to invest in a particular technology that helps to improve the fuel efficiency of cars, as other automobile companies who had invested in similar technologies had not achieved much success. The type of decision-making error made by Rupert is known as _____.

• A) availability bias
• B) confirmation error
• C) adjustment bias
• D) lack-of-participation error
• E) representativeness bias

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Definitions:

Price Rationing

The process by which the market system allocates goods and services to consumers when quantity demanded exceeds quantity supplied.

Bypass

To go around or avoid an obstacle or regulation, often by using alternative methods or routes.

Costly

Incurring a high expense or requiring considerable resources, often more than expected or desired.

Favored Customers

Those who receive special treatment from dealers during situations of excess demand.