Question 1

Explain what the confluence approach is.

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Question 2

Simple rules that guide in making complex decisions are known as

Accepted Answer

Simple rules that guide in making complex decisions are known as heuristics. It is a mental shortcut that allows individuals to make decisions quickly by using limited information and minimal mental effort. It is helpful in cases where there is a time constraint or limited information. However, heuristics may also lead to errors and biases in decision-making.

Question 3

Janet needs to make an important decision about managing her business. As she thinks about the situation,she quickly recalls a similar situation in a friend's business. Because she thinks the friend's situation and hers are similar,she decides to take the same action that her friend did;to use her friend's actions as simple rules to help her through the complicated decision. Unfortunately,Janet is not aware that there was another major factor in her friend's situation that influenced the decision heavily. Which of the following best describes what Janet is using in this situation?

Accepted Answer

Janet is using the availability heuristic, where she is relying on the information that is most readily available to her (her friend's situation) to make her decision. However, she is not considering other important factors that may have influenced her friend's decision.

Question 4

Explain heuristics. Can they be both positive and negative?

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Question 5

Assume that you are remembering the first time you met a particular person. In recalling this memory,you are using

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Remembering the first time you met a particular person involves recalling a specific event from the past, which requires factual knowledge, or information that has been previously learned or experienced.

Question 6

Define analytical,creative,and practical intelligence and explain why all three are important for entrepreneurs.

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Question 7

Explain the relationship between becoming an entrepreneur and the concept of illusion of control.

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Question 8

Say you are sitting in class and the professor is saying something that is contradictory to what you believe to be true. Since it contradicts what you believe,you do not think it is important. Your actions represent

Accepted Answer

This scenario exhibits confirmation bias, which is the tendency to search for, interpret, and remember information in a way that confirms one's preexisting beliefs or hypotheses. The individual in this scenario is disregarding information that contradicts their beliefs, hence demonstrating confirmation bias.

Question 9

Assume that you are an entrepreneur. You believe strongly that customers normally like to see a lower price on products - "Lower price sells more product." You attended a professional conference recently and heard a speaker say that a good approach would be to try to make your product different and valuable in the eyes of the customer and charge a higher price. At the same conference,you heard another speaker argue that "yes,customers do like to see lower prices." It sounded to you like the second speaker presented a more logical argument. The first speaker's ideas just didn't sound right to you. Your views on this are an example of

Accepted Answer

The entrepreneur's views demonstrate confirmation bias, as they are favoring information that confirms their pre-existing beliefs about lower prices selling more products and rejecting information that challenges those beliefs.

Question 10

Assume that you just looked in your address book to find where a friend lives. Then you walk down the street to find that address. In remembering the address while you are looking for it,you are using

Accepted Answer

Working memory is responsible for temporarily holding and manipulating information needed for complex cognitive tasks, such as finding an address. In this scenario, you are using your working memory to hold onto the address information while you search for the correct location. The other options, such as factual knowledge memory or long-term memory, refer to memories that are more permanent and long-lasting. Complementary memory is not a commonly used term in psychology, and prototypes are not relevant to this scenario.

Question 11

An entrepreneur will be making a speech to business and government leaders in the community in fifteen minutes. Although this is a very important speech,the entrepreneur is calm and confident. S/he is relying on many speeches delivered successfully in the past. The success in past speeches includes remembering to address the people at the head table,when and how to advance the PowerPoint presentation slides,to repeat a question from the audience so that all can hear it,etc. The entrepreneur is relying on

Accepted Answer

The entrepreneur's calm and confident approach is due to procedural memory. Procedural memory is a type of long-term memory that aids in the performance of particular types of tasks without conscious awareness of these previous experiences. The entrepreneur's successful past speeches have been stored as procedural memory, so s/he can draw upon them and perform well in the current speech.

Question 12

Define creativity and discuss its importance,concepts,and hierarchical networks.

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Question 13

Explain why a person who is more optimistic might be more likely to recognize opportunities than a person who is less optimistic.

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Question 14

Assume that you are making a relatively complex decision. There is some information that you can remember fairly easily,but other information is more difficult to remember. You probably will perceive the easy to remember information as more important or accurate than the difficult to remember information. This represents the

Accepted Answer

The phenomenon described in the scenario is known as the availability heuristic, where people tend to rely on easily recalled information to make judgments or decisions, even if it may not be the most accurate or relevant.

Question 15

It usually is a positive thing if entrepreneurs build relationships with other business people,politicians,and community leaders in the markets in which they do business. The ability to build these relationships is known as

Accepted Answer

Social intelligence refers to the ability to understand and navigate social situations and relationships effectively. Entrepreneurs with strong social intelligence can build and maintain relationships with a diverse range of people in their business, political, and social communities, which can enhance their opportunities for success.

Question 16

Discuss the idea of prototypes and explain how prototypes could help or hinder creativity.

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Question 17

A person visualizes certain types of cars when he hears the word "vehicle." In recalling the certain types of cars,the person is using the cognitive framework called

Accepted Answer

Prototypes are the cognitive frameworks that are used to quickly and efficiently categorize objects or concepts. In this case, the person is able to recall certain types of cars when they hear the word "vehicle" because of the prototype they have in their mind associated with that concept.

Question 18

A person came up with an idea for a new product even though she was not actively searching for it. This represents the idea of

Accepted Answer

This scenario aligns with Kirzner's concept of alertness, where individuals may identify opportunities that are currently unnoticed or underexploited. It suggests that the person was alert to a potential need or gap in the market that could be filled with a new product.

Question 19

An entrepreneurs business is not doing well and the future does not look promising. However,since the entrepreneur has so much of his life and money invested in the business,he believes that if he invests more time and money,he can turn it around. His actions demonstrate the idea of

Accepted Answer

The scenario describes an example of escalation of commitment. This is when an individual continues to invest resources into a failing project or business, believing that future returns will justify the additional investment. This behavior is sometimes referred to as the "sunk cost fallacy."

Question 20

An entrepreneur running an ice cream store that makes and sells its own ice cream comes up with a new flavor for ice cream while thinking about the new colors and fashions of clothes coming out. This represents which of the following cognitive processes?

Accepted Answer

The entrepreneur is making a connection between the new colors and fashions of clothes and creating a new flavor of ice cream. This shows pattern recognition, which is the ability to recognize relationships and connections between different pieces of information. The other options do not seem to apply to this scenario.

Quiz 3: Cognitive Foundations of Entrepreneurship: Creativity and Opportunity Recognition