, Chapter 1 Introduction to Managerial Decision Making
x x x x x x
Multiple xchoice
1) An xoptimal xsearch xfor xalternatives xshould xlast:
a. As xlong xas xneeded xto xfind xthe xbest xsolution.
b. As xlong xas xneeded xto xfind xthe xfirst xgood xenough xsolution.
c. As xlong xas xthe xcost xof xthe xsearch xdoes xnot xoutweigh xthe xvalue xof xthe xadded
xinformation.
d. As xlong xas xthe xcost xof xthe xsearch xis xwithin xthe xappropriate xlimits xset xby xthe
x decision xmaker. xAns: xc
Response: xp. x2-3
2) Rating xalternatives xon xeach xof xthe xdecision xcriteria xis xconsidered xthe xmost xdifficult
xstage xof xthe xdecision-making xprocess, xbecause:
a. It xassumes xwe xhave xprecisely xdefined xour xpriorities.
b. It xrequires xus xto xforecast xhow xeach xalternative xsolution xwill xachieve xeach xof
xour xdecision xcriteria.
c. It xrequires xus xto xcompare xall xof xthe xalternatives xsimultaneously.
d. It xis xlikely xto xfail xif xour xproblem xis xnot xdefined xcorrectly, xand xthis xfailure xwill
x not xbe xdetected. xAns: xb
Response: xp. x3
3) In xthe xinterplay xbetween xsystem x1 xand xsystem x2 xthinking, xthe xkey xgoal xfor xmanagers xis:
a. To ximprove xtheir xuse xof xsystem x1 xthinking.
b. To xattempt xto xuse xsystem x2 xthinking xas xmuch xas xpossible.
c. To xapply xboth xsystems xin xmaking xdecisions xin xorder xto xperform xa xmore
xthorough xand xcomplex xsearch xfor xalternatives.
d. To xidentify xwhen xthey xshould xmove xfrom xsystem x1 xto xsystem x2
thinking. xAns: xd xResponse: xp. x4
x
, 4) Which xof xthe xfollowing xis xa xtypical xcharacteristic xof xheuristics?
a. They xprovide xus xwith xa xsimple xway xof xdealing xwith xcomplex xproblems.
b. They xhave xthe xbest xlikelihood xof xreaching xan xoptimal xsolution xto xa xproblem.
c. They xare xtime xand xresource xconsuming.
d. They xare xused xmainly xby xirrational xdecision xmakers.
Ans: xa
x Response: xp.
6
x
Questions x5-8 xdescribe xexamples xof xheuristics xoutlined xin xthe xchapter. xFor xeach xquestion,
xindicate xwhich xheuristic xit xdescribes:
a. The xrepresentativeness xheuristic.
b. The xavailability xheuristic.
c. The xconfirmation xheuristic.
d. The xaffect xheuristic.
5) Inner xcity xcrime xin xthe xU.S. xgets xconsiderable xmedia xcoverage, xsuch xthat xevery
xhomicide xis xreported xin xthe xnews. xIn xcontrast, xa xstory xof xa xperson xwho xdied xfrom
xa xheart xattack xrarely xmakes xthe xnews. xThis xleads xpeople xto xoverestimate xthe
xfrequency xof xdeaths xdue xto xhomicides xrelative xto xthose xdue xto xheart xfailure.
Ans: xb
x Response: xp.
7-8
x
6) John xis xover xseven xfeet xtall. xWhen xasked xwhether xJohn xis xa xprofessional
x basketball xplayer xor xa xsoftware xprogrammer, xmany xpeople xpredict xthe xformer,
x even xthough xthere xare xmany xmore xsoftware xprogrammers, xeven xvery xtall xones,
x than xprofessional xbasketball xplayers. Ans: xa
Response: xp. x8-9
, 7) After xreading xabout xthe xpositive xeffect xchocolate xhas xon xstudent xperformance, xa
x teacher xgives xeach xstudent xin xa xclass xa xchocolate xbar xbefore xtaking xan xexam. x15 xout
x of x22 xstudents xin xthat xclass xget xan xA xon xthe xexam. xThe xteacher xtherefore xconcludes
x that xchocolate xenhances xperformance. xAns: xc
Response: xp. x9-10
8) A xcommon xwisdom xin xpolitics xis xthat xthe xmore xan xargument xis xrepeated, xthe
xmore xit xwill xbe xconsidered xby xthe xpublic xas xreliable xand xtrue.
Ans: xb
x Response: xp.
x7-8
9) The xaffect xheuristic xcan xexplain xwhy
a. People xwho xlive xin xCalifornia xare xassumed xto xbe xhappier xthan xpeople
xwho xlive xin xthe xMidwest.
b. Students xpredict xthey xwill xbe xsadder xafter xgetting xa xbad xgrade xon xa
xtest xthan xthey xactually xare xin xthese xsituations.
c. People xdo xnot xremember xsad xevents xfrom xtheir xearly xchildhood.
d. Stock xprices xgo xup xon xsunny xdays.
Ans: xd
x Response: xp.
x10
True/False
10) Succumbing xto xheuristics xis xinevitable, xand xthere xis xno xway xto xmake xjudgment
xless xprone xthem. xRather, xone xcan xonly xbe xaware xof xthe xbiasing xeffect xheuristics
xhave xon xone’s xjudgment.
Ans: xFalse
x Response: xp.
x x x x x x
Multiple xchoice
1) An xoptimal xsearch xfor xalternatives xshould xlast:
a. As xlong xas xneeded xto xfind xthe xbest xsolution.
b. As xlong xas xneeded xto xfind xthe xfirst xgood xenough xsolution.
c. As xlong xas xthe xcost xof xthe xsearch xdoes xnot xoutweigh xthe xvalue xof xthe xadded
xinformation.
d. As xlong xas xthe xcost xof xthe xsearch xis xwithin xthe xappropriate xlimits xset xby xthe
x decision xmaker. xAns: xc
Response: xp. x2-3
2) Rating xalternatives xon xeach xof xthe xdecision xcriteria xis xconsidered xthe xmost xdifficult
xstage xof xthe xdecision-making xprocess, xbecause:
a. It xassumes xwe xhave xprecisely xdefined xour xpriorities.
b. It xrequires xus xto xforecast xhow xeach xalternative xsolution xwill xachieve xeach xof
xour xdecision xcriteria.
c. It xrequires xus xto xcompare xall xof xthe xalternatives xsimultaneously.
d. It xis xlikely xto xfail xif xour xproblem xis xnot xdefined xcorrectly, xand xthis xfailure xwill
x not xbe xdetected. xAns: xb
Response: xp. x3
3) In xthe xinterplay xbetween xsystem x1 xand xsystem x2 xthinking, xthe xkey xgoal xfor xmanagers xis:
a. To ximprove xtheir xuse xof xsystem x1 xthinking.
b. To xattempt xto xuse xsystem x2 xthinking xas xmuch xas xpossible.
c. To xapply xboth xsystems xin xmaking xdecisions xin xorder xto xperform xa xmore
xthorough xand xcomplex xsearch xfor xalternatives.
d. To xidentify xwhen xthey xshould xmove xfrom xsystem x1 xto xsystem x2
thinking. xAns: xd xResponse: xp. x4
x
, 4) Which xof xthe xfollowing xis xa xtypical xcharacteristic xof xheuristics?
a. They xprovide xus xwith xa xsimple xway xof xdealing xwith xcomplex xproblems.
b. They xhave xthe xbest xlikelihood xof xreaching xan xoptimal xsolution xto xa xproblem.
c. They xare xtime xand xresource xconsuming.
d. They xare xused xmainly xby xirrational xdecision xmakers.
Ans: xa
x Response: xp.
6
x
Questions x5-8 xdescribe xexamples xof xheuristics xoutlined xin xthe xchapter. xFor xeach xquestion,
xindicate xwhich xheuristic xit xdescribes:
a. The xrepresentativeness xheuristic.
b. The xavailability xheuristic.
c. The xconfirmation xheuristic.
d. The xaffect xheuristic.
5) Inner xcity xcrime xin xthe xU.S. xgets xconsiderable xmedia xcoverage, xsuch xthat xevery
xhomicide xis xreported xin xthe xnews. xIn xcontrast, xa xstory xof xa xperson xwho xdied xfrom
xa xheart xattack xrarely xmakes xthe xnews. xThis xleads xpeople xto xoverestimate xthe
xfrequency xof xdeaths xdue xto xhomicides xrelative xto xthose xdue xto xheart xfailure.
Ans: xb
x Response: xp.
7-8
x
6) John xis xover xseven xfeet xtall. xWhen xasked xwhether xJohn xis xa xprofessional
x basketball xplayer xor xa xsoftware xprogrammer, xmany xpeople xpredict xthe xformer,
x even xthough xthere xare xmany xmore xsoftware xprogrammers, xeven xvery xtall xones,
x than xprofessional xbasketball xplayers. Ans: xa
Response: xp. x8-9
, 7) After xreading xabout xthe xpositive xeffect xchocolate xhas xon xstudent xperformance, xa
x teacher xgives xeach xstudent xin xa xclass xa xchocolate xbar xbefore xtaking xan xexam. x15 xout
x of x22 xstudents xin xthat xclass xget xan xA xon xthe xexam. xThe xteacher xtherefore xconcludes
x that xchocolate xenhances xperformance. xAns: xc
Response: xp. x9-10
8) A xcommon xwisdom xin xpolitics xis xthat xthe xmore xan xargument xis xrepeated, xthe
xmore xit xwill xbe xconsidered xby xthe xpublic xas xreliable xand xtrue.
Ans: xb
x Response: xp.
x7-8
9) The xaffect xheuristic xcan xexplain xwhy
a. People xwho xlive xin xCalifornia xare xassumed xto xbe xhappier xthan xpeople
xwho xlive xin xthe xMidwest.
b. Students xpredict xthey xwill xbe xsadder xafter xgetting xa xbad xgrade xon xa
xtest xthan xthey xactually xare xin xthese xsituations.
c. People xdo xnot xremember xsad xevents xfrom xtheir xearly xchildhood.
d. Stock xprices xgo xup xon xsunny xdays.
Ans: xd
x Response: xp.
x10
True/False
10) Succumbing xto xheuristics xis xinevitable, xand xthere xis xno xway xto xmake xjudgment
xless xprone xthem. xRather, xone xcan xonly xbe xaware xof xthe xbiasing xeffect xheuristics
xhave xon xone’s xjudgment.
Ans: xFalse
x Response: xp.
