Question 1

__________ represent(s)cognitive shortcuts or biases that are used to simplify the process of making decisions.
A) Normative intuitions
B) Judgmental heuristics
C) Holistic hunches
D) Explicit knowledge
E) Tacit knowledge

Accepted Answer

Judgmental heuristics are cognitive shortcuts or biases that are used to simplify the process of making decisions. Option A (Normative intuitions) refers to a person's inner sense of what's right or wrong, while options C (Holistic hunches), D (Explicit knowledge), and E (Tacit knowledge) do not relate to cognitive shortcuts or biases.

Question 2

Despite the information available,Becky consistently uses her cell phone to text when driving down the highway.This is an example of ______ decision making.
A) rational
B) nonrational
C) optimizing
D) normative
E) alternative

Accepted Answer

Nonrational decision making involves making decisions based on personal biases, emotions, or habits rather than facts and information. In this scenario, Becky is choosing to text while driving despite knowing the risks and potential dangers, which suggests that her decision-making process is nonrational.

Question 3

An example of the ________ heuristic occurs when you see news reports about people losing their jobs,and then start believing that you are in danger of being laid off.You start lying awake in bed each night worrying that you are about to be fired.
A) availability
B) hindsight
C) representativeness
D) anchoring
E) framing

Accepted Answer

The availability heuristic is when people make judgments based on how easily and vividly examples come to mind. In this case, news reports of people losing their jobs are readily available and thus have led the person to believe that they are at risk of losing their job as well. This has led to worry and anxiety about being fired.

Question 4

At Peter James Consulting,managers are in the process of submitting their budget cuts for the next fiscal year.In evaluating alternatives,managers should consider all of the following except
A) Will these cuts impact the quality of our service?
B) What is the budget impact of these changes?
C) Are these the right choices to make for our company?
D) Is this the choice that I, personally, would like to make?
E) Is this the best use of our resources company-wide?

Accepted Answer

Personal preferences should not be a factor in budget cuts. Managers should focus on what is best for the company as a whole and consider all other factors listed.

Question 5

One of the benefits of using intuition to make decisions is that it can
A) be useful when you have unlimited resources.
B) help managers who are bounded.
C) speed up the decision-making process.
D) help managers understand all of the highly desirable conditions.
E) slow down the decision-making process so you don't make a mistake.

Accepted Answer

Using intuition can speed up the decision-making process as it allows for quick and instinctive judgments based on past experiences and existing knowledge. This can be particularly useful in situations where there is limited time for analysis or when the available data is incomplete or ambiguous.

Question 6

________ is solving problems by producing the best possible solution.
A) Satisficing
B) Optimizing
C) Minimizing
D) Using intuition
E) Rationalizing

Accepted Answer

Optimizing is the process of solving a problem by creating the best possible solution. Satisficing is settling for a satisfactory solution rather than the best, minimizing is reducing something to its smallest possible form, using intuition is making decisions based on instinct or feelings, and rationalizing is creating a logical justification for a decision that may not be based on facts or reality. Therefore, the best choice is optimizing.

Question 7

In a complicated decision environment,a manager should use the _______ method of decision making.
A) heuristic
B) rational
C) satisficing
D) nonrational
E) intuition

Accepted Answer

In a complicated decision environment, a rational method of decision making is the best choice because it involves gathering all necessary information, analyzing options, and weighing the pros and cons before making a decision. This approach ensures that decisions are based on logic and reasoning rather than emotions or biases. The other methods, such as heuristic or intuition, may be useful in certain situations but are more prone to errors and biases. Satisficing and nonrational methods may lead to suboptimal outcomes and are not recommended in a complicated decision environment.

Question 8

In a simple environment,a manager should use the _______ model of decision making.
A) heuristic
B) rational
C) satisficing
D) nonrational
E) intuition

Accepted Answer

In a simple environment, the rational model of decision making is most appropriate because it assumes that the decision maker has complete information and can identify all possible alternatives and their outcomes, which is more feasible in a simpler context.

Question 9

In the _________ bias,a decision maker is influenced by the first information received about a decision,even if it is irrelevant.
A) confirmation
B) availability
C) representativeness
D) anchoring
E) framing

Accepted Answer

The anchoring bias refers to the tendency of decision makers to rely too heavily on the first piece of information they receive, even if it is irrelevant or inconsequential to the decision at hand. This bias can have a powerful impact on subsequent decisions and can lead to errors in judgment and decision-making.

Question 10

_________ bias is especially evident in entrepreneurs who are deciding to start and sustain new ventures.
A) Representativeness
B) Overconfidence
C) Escalation of commitment
D) Framing
E) Confirmation

Accepted Answer

Overconfidence bias is particularly common in entrepreneurs who are making decisions regarding the establishment and maintenance of new ventures. Entrepreneurs are generally optimistic about their chances of success and often overestimate their own abilities, leading to overconfidence bias.

Question 11

Ryan is looking to buy a used car.He seems to be most concerned with the color and style of the car,and uses those criteria as a basis for evaluating the value of the car,rather than considering how well the engine or the transmission is maintained.This is an example of
A) confirmation bias.
B) availability bias.
C) anchoring bias.
D) overconfidence bias.
E) framing bias.

Accepted Answer

Ryan is focusing on superficial attributes (color and style) as the primary basis for evaluating the car's value, which is an example of anchoring bias, where an individual relies too heavily on an initial piece of information.

Question 12

Madetra makes low-priced leather handbags and wallets.They keep their costs down,but have to cut some corners.Now,their rate of return is 25 percent.Madetra considers this a(n)________ or "good enough" solution.
A) satisficing
B) optimizing
C) minimizing
D) intuitive
E) rationalizing

Accepted Answer

The term "satisficing" refers to a decision-making strategy in which an organization aims to find a solution that is good enough to meet its needs and objectives, rather than trying to optimize its performance. In this scenario, Madetra's decision to keep costs low and achieve a 25 percent rate of return suggests that they are utilizing a satisficing strategy, rather than attempting to optimize their profits or minimize their costs.

Question 13

______ is the idea that decision makers are restricted by constraints when making decisions.
A) Normative intuition
B) Holistic intuition
C) Bounded rationality
D) Optimal satisfaction
E) Explicit knowledge

Accepted Answer

Bounded rationality suggests that decision makers are limited in their ability to process information and make decisions due to various constraints such as time, cognitive ability, and access to information. This means that decision makers may not always make "perfectly rational" decisions, but instead make choices that are satisfactory and good enough under the given constraints.

Question 14

Roger runs a small nonprofit group.He wants to buy a copier,because he knows it will be cheaper than going to the copy store.One of the other employees remarks that they should make do with an inexpensive copier from Walmart or Staples,but Roger wants one that will copy legal documents and collate reports.Roger may be impacted by _______ bias.
A) framing
B) hindsight
C) anchoring
D) availability
E) confirmation

Accepted Answer

The answer of Roger runs a small nonprofit group.He wants...

Question 15

Rachel bought a table at a thrift store for 0.She had a feeling it might be valuable.When cleaned up and assessed,the table turned out to be an antique from the 1700s,worth $3,250.What was Rachel using to make her decision?
A) satisficing
B) rationalization
C) intuition
D) explicit knowledge
E) evidence-based decision making

Accepted Answer

Rachel was using her intuition, or her gut feeling, to make the decision to buy the table. She had a feeling it might be valuable, which led her to make the purchase. This was not based on any explicit knowledge or evidence-based decision making.

Question 16

The forms of intuition are
A) tacit and explicit.
B) formal and informal.
C) rational and nonrational.
D) holistic hunches and automated experiences.
E) directive and analytical.

Accepted Answer

The forms of intuition presented in the question are holistic hunches and automated experiences, which align with option D. Option A refers to the types of knowledge, rather than intuition. Option B and C use formal vs informal or rational vs nonrational as the categories for intuition, which are not the forms of intuition presented in the question. Option E uses directive and analytical, which are not mentioned in the question either.

Question 17

Teresa has a problem.She is working on three projects and the deadline for Project C was moved up.This particular client,Client C,is fairly easy-going and never puts any pressure on her unless it's absolutely necessary.Teresa decides to talk to Client A who always wants the project results a few days before the actual deadline.There might be some flexibility with that timeline. Teresa is using _______ in order to make this decision.
A) her expertise
B) a managerial style
C) rational processes
D) informal guidelines
E) optimizing abilties

Accepted Answer

The answer of Teresa has a problem.She is working on...

Question 18

Which of the following is one of the assumptions underlying nonrational models of decision making?
A) Managers do not possess complete information.
B) Rational decision making is easy.
C) The context for managerial decisions is simple and stable.
D) Decisions can be made with certainty.
E) Managers do not face restrictions when making decisions.

Accepted Answer

Nonrational models of decision making assume that managers do not possess complete information, which means they have to rely on educated guesses and intuition when making decisions. This is in contrast to the rational model, which assumes that managers have access to all relevant information and can make decisions based solely on logical analysis.

Question 19

Leon Law Offices only hires graduates from Ivy League schools because clients have been impressed by those credentials in the past.This is an example of ________ ,and in this case,the "school attended" criterion is being used to facilitate complex information processing associated with employment interviews.
A) confirmation
B) availability
C) representativeness
D) overconfidence
E) framing

Accepted Answer

This is an example of the representativeness heuristic, where the choice of Ivy League graduates is based on the stereotype that Ivy League schools produce successful individuals. The criterion for selection is being used as a mental shortcut to make a quick judgment.

Question 20

We all use shortcuts or ________ when making decisions.
A) bounded rationality
B) holistic hunches
C) rational thought
D) personal biases
E) judgmental heuristics

Accepted Answer

Judgmental heuristics refer to mental shortcuts that people use to make decisions quickly and efficiently. These shortcuts, however, can sometimes lead to errors and biases in judgment if not carefully considered. Therefore, it is the best choice to complete the blank in the given statement.

Quiz 11: Decision Making and Creativity

__________ represent(s) cognitive shortcuts or biases that are used to simplify the process of making decisions.

Despite the information available,Becky consistently uses her cell phone to text when driving down the highway.This is an example of ______ decision making.

An example of the ________ heuristic occurs when you see news reports about people losing their jobs,and then start believing that you are in danger of being laid off.You start lying awake in bed each night worrying that you are about to be fired.

At Peter James Consulting,managers are in the process of submitting their budget cuts for the next fiscal year.In evaluating alternatives,managers should consider all of the following except

One of the benefits of using intuition to make decisions is that it can

________ is solving problems by producing the best possible solution.

In a complicated decision environment,a manager should use the _______ method of decision making.

In a simple environment,a manager should use the _______ model of decision making.

In the _________ bias,a decision maker is influenced by the first information received about a decision,even if it is irrelevant.

_________ bias is especially evident in entrepreneurs who are deciding to start and sustain new ventures.

Ryan is looking to buy a used car.He seems to be most concerned with the color and style of the car,and uses those criteria as a basis for evaluating the value of the car,rather than considering how well the engine or the transmission is maintained.This is an example of

Madetra makes low-priced leather handbags and wallets.They keep their costs down,but have to cut some corners.Now,their rate of return is 25 percent.Madetra considers this a(n) ________ or "good enough" solution.

______ is the idea that decision makers are restricted by constraints when making decisions.

Rachel bought a table at a thrift store for 0.She had a feeling it might be valuable.When cleaned up and assessed,the table turned out to be an antique from the 1700s,worth $3,250.What was Rachel using to make her decision?

The forms of intuition are

Which of the following is one of the assumptions underlying nonrational models of decision making?

We all use shortcuts or ________ when making decisions.