#1
What is decision making?
A process of selecting the best option among alternatives
ExplanationDecision making involves choosing the optimal choice from available alternatives.
#2
Which of the following is NOT a step in the decision-making process?
Choosing the first option that comes to mind
ExplanationThis contradicts the deliberative nature of decision making which involves considering multiple options.
#3
What is a trade-off?
Sacrificing one thing for another
ExplanationTrade-offs involve giving up one thing in exchange for another, highlighting opportunity costs.
#4
Which of the following is an example of opportunity cost?
The cost of the next best alternative
ExplanationOpportunity cost represents the value of the best alternative forgone in making a decision.
#5
What is the difference between a trade-off and an opportunity cost?
Trade-off involves making a choice between alternatives, while opportunity cost is the value of the next best alternative foregone.
ExplanationTrade-offs involve selecting one option over another, while opportunity cost represents the value of the option not chosen.
#6
Which of the following is NOT a common decision-making heuristic?
Algorithmic thinking
ExplanationAlgorithmic thinking involves systematic processes, not heuristic shortcuts.
#7
What does the maximization principle suggest in decision-making?
To maximize benefits while minimizing costs
ExplanationMaximization principle advocates for optimizing outcomes by balancing benefits against costs.
#8
What is the 'status quo bias' in decision-making?
A tendency to stick with the current situation, even if better options exist
ExplanationStatus quo bias leads individuals to favor maintaining current conditions, resisting change.
#9
In decision theory, what does 'satisficing' refer to?
Accepting a satisfactory but not necessarily optimal solution
ExplanationSatisficing involves choosing a solution that meets the minimum requirements rather than the best possible one.
#10
Which of the following is an example of a sunk cost?
The cost of an advertising campaign that did not yield expected results
ExplanationSunk costs are unrecoverable expenses incurred regardless of future actions, like an unsuccessful advertising campaign.
#11
What is the role of risk aversion in decision-making?
To balance risks and rewards
ExplanationRisk aversion involves weighing potential gains against potential losses to make cautious decisions.
#12
Which of the following is NOT a common cognitive bias that affects decision-making?
Decision fatigue bias
ExplanationDecision fatigue refers to reduced ability to make decisions after prolonged deliberation, not a cognitive bias.
#13
What is the role of intuition in decision-making?
To complement rational analysis by providing valuable insights
ExplanationIntuition offers quick, subconscious insights that can complement and inform rational decision-making processes.
#14
In decision-making, what is the 'groupthink' phenomenon?
A tendency for group members to conform to a shared belief without critically evaluating alternatives
ExplanationGroupthink leads to flawed decision-making as individuals prioritize consensus over critical evaluation of alternatives.