, Chapter 1 Introduction to Managerial Decision Making
nn nn nn nn nn nn
Multiple nnchoice
1) An nnoptimal nnsearch nnfor nnalternatives nnshould nnlast:
a. As nnlong nnas nnneeded nnto nnfind nnthe nnbest nnsolution.
b. As nnlong nnas nnneeded nnto nnfind nnthe nnfirst nngood nnenough nnsolution.
c. As nnlong nnas nnthe nncost nnof nnthe nnsearch nndoes nnnot nnoutweigh nnthe nnvalue nnof nnthe nnadded
nninformation.
d. As nnlong nnas nnthe nncost nnof nnthe nnsearch nnis nnwithin nnthe nnappropriate nnlimits nnset nnby nnthe
decision nnmaker. nnAns: nnc
nn
Response: nnp. nn2-3
2) Rating nnalternatives nnon nneach nnof nnthe nndecision nncriteria nnis nnconsidered nnthe nnmost nndifficult
nnstage nnof nnthe nndecision-making nnprocess, nnbecause:
a. It nnassumes nnwe nnhave nnprecisely nndefined nnour nnpriorities.
b. It nnrequires nnus nnto nnforecast nnhow nneach nnalternative nnsolution nnwill nnachieve nneach nnof
nnour nndecision nncriteria.
c. It nnrequires nnus nnto nncompare nnall nnof nnthe nnalternatives nnsimultaneously.
d. It nnis nnlikely nnto nnfail nnif nnour nnproblem nnis nnnot nndefined nncorrectly, nnand nnthis nnfailure nnwill
not nnbe nndetected. nnAns: nnb
nn
Response: nnp. nn3
3) In nnthe nninterplay nnbetween nnsystem nn1 nnand nnsystem nn2 nnthinking, nnthe nnkey nngoal nnfor nnmanagers
nnis:
a. To nnimprove nntheir nnuse nnof nnsystem nn1 nnthinking.
b. To nnattempt nnto nnuse nnsystem nn2 nnthinking nnas nnmuch nnas nnpossible.
c. To nnapply nnboth nnsystems nnin nnmaking nndecisions nnin nnorder nnto nnperform nna nnmore
nnthorough nnand nncomplex nnsearch nnfor nnalternatives.
d. To nnidentify nnwhen nnthey nnshould nnmove nnfrom nnsystem nn1 nnto nnsystem nn2
nn thinking. nnAns: nnd nnResponse: nnp. nn4
, 4) Which nnof nnthe nnfollowing nnis nna nntypical nncharacteristic nnof nnheuristics?
a. They nnprovide nnus nnwith nna nnsimple nnway nnof nndealing nnwith nncomplex nnproblems.
b. They nnhave nnthe nnbest nnlikelihood nnof nnreaching nnan nnoptimal nnsolution nnto nna nnproblem.
c. They nnare nntime nnand nnresource nnconsuming.
d. They nnare nnused nnmainly nnby nnirrational nndecision nnmakers.
Ans: nna
nn Response: nnp.
6
nn
Questions nn5-8 nndescribe nnexamples nnof nnheuristics nnoutlined nnin nnthe nnchapter. nnFor nneach nnquestion,
nnindicate nnwhich nnheuristic nnit nndescribes:
a. The nnrepresentativeness nnheuristic.
b. The nnavailability nnheuristic.
c. The nnconfirmation nnheuristic.
d. The nnaffect nnheuristic.
5) Inner nncity nncrime nnin nnthe nnU.S. nngets nnconsiderable nnmedia nncoverage, nnsuch nnthat nnevery
nnhomicide nnis nnreported nnin nnthe nnnews. nnIn nncontrast, nna nnstory nnof nna nnperson nnwho nndied
nnfrom nna nnheart nnattack nnrarely nnmakes nnthe nnnews. nnThis nnleads nnpeople nnto nnoverestimate
nnthe nnfrequency nnof nndeaths nndue nnto nnhomicides nnrelative nnto nnthose nndue nnto nnheart nnfailure.
Ans: nnb
nn Response: nnp.
7-8
nn
6) John nnis nnover nnseven nnfeet nntall. nnWhen nnasked nnwhether nnJohn nnis nna nnprofessional
nn basketball nnplayer nnor nna nnsoftware nnprogrammer, nnmany nnpeople nnpredict nnthe nnformer,
nn even nnthough nnthere nnare nnmany nnmore nnsoftware nnprogrammers, nneven nnvery nntall nnones,
nn than nnprofessional nnbasketball nnplayers. Ans: nna
Response: nnp. nn8-9
, 7) After nnreading nnabout nnthe nnpositive nneffect nnchocolate nnhas nnon nnstudent nnperformance, nna
nn teacher nngives nneach nnstudent nnin nna nnclass nna nnchocolate nnbar nnbefore nntaking nnan nnexam. nn15
nn out nnof nn22 nnstudents nnin nnthat nnclass nnget nnan nnA nnon nnthe nnexam. nnThe nnteacher nntherefore
nn concludes nnthat nnchocolate nnenhances nnperformance. nnAns: nnc
Response: nnp. nn9-10
8) A nncommon nnwisdom nnin nnpolitics nnis nnthat nnthe nnmore nnan nnargument nnis nnrepeated, nnthe
nnmore nnit nnwill nnbe nnconsidered nnby nnthe nnpublic nnas nnreliable nnand nntrue.
Ans: nnb
nn Response: nnp.
7-8
nn
9) The nnaffect nnheuristic nncan nnexplain nnwhy
a. People nnwho nnlive nnin nnCalifornia nnare nnassumed nnto nnbe nnhappier nnthan nnpeople
nnwho nnlive nnin nnthe nnMidwest.
b. Students nnpredict nnthey nnwill nnbe nnsadder nnafter nngetting nna nnbad nngrade nnon nna
nntest nnthan nnthey nnactually nnare nnin nnthese nnsituations.
c. People nndo nnnot nnremember nnsad nnevents nnfrom nntheir nnearly nnchildhood.
d. Stock nnprices nngo nnup nnon nnsunny nndays.
Ans: nnd
nn Response: nnp.
10
nn
True/False
10) Succumbing nnto nnheuristics nnis nninevitable, nnand nnthere nnis nnno nnway nnto nnmake nnjudgment
nnless nnprone nnthem. nnRather, nnone nncan nnonly nnbe nnaware nnof nnthe nnbiasing nneffect nnheuristics
nnhave nnon nnone’s nnjudgment.
Ans: nnFalse
nn Response: nnp.
11
nn
nn nn nn nn nn nn
Multiple nnchoice
1) An nnoptimal nnsearch nnfor nnalternatives nnshould nnlast:
a. As nnlong nnas nnneeded nnto nnfind nnthe nnbest nnsolution.
b. As nnlong nnas nnneeded nnto nnfind nnthe nnfirst nngood nnenough nnsolution.
c. As nnlong nnas nnthe nncost nnof nnthe nnsearch nndoes nnnot nnoutweigh nnthe nnvalue nnof nnthe nnadded
nninformation.
d. As nnlong nnas nnthe nncost nnof nnthe nnsearch nnis nnwithin nnthe nnappropriate nnlimits nnset nnby nnthe
decision nnmaker. nnAns: nnc
nn
Response: nnp. nn2-3
2) Rating nnalternatives nnon nneach nnof nnthe nndecision nncriteria nnis nnconsidered nnthe nnmost nndifficult
nnstage nnof nnthe nndecision-making nnprocess, nnbecause:
a. It nnassumes nnwe nnhave nnprecisely nndefined nnour nnpriorities.
b. It nnrequires nnus nnto nnforecast nnhow nneach nnalternative nnsolution nnwill nnachieve nneach nnof
nnour nndecision nncriteria.
c. It nnrequires nnus nnto nncompare nnall nnof nnthe nnalternatives nnsimultaneously.
d. It nnis nnlikely nnto nnfail nnif nnour nnproblem nnis nnnot nndefined nncorrectly, nnand nnthis nnfailure nnwill
not nnbe nndetected. nnAns: nnb
nn
Response: nnp. nn3
3) In nnthe nninterplay nnbetween nnsystem nn1 nnand nnsystem nn2 nnthinking, nnthe nnkey nngoal nnfor nnmanagers
nnis:
a. To nnimprove nntheir nnuse nnof nnsystem nn1 nnthinking.
b. To nnattempt nnto nnuse nnsystem nn2 nnthinking nnas nnmuch nnas nnpossible.
c. To nnapply nnboth nnsystems nnin nnmaking nndecisions nnin nnorder nnto nnperform nna nnmore
nnthorough nnand nncomplex nnsearch nnfor nnalternatives.
d. To nnidentify nnwhen nnthey nnshould nnmove nnfrom nnsystem nn1 nnto nnsystem nn2
nn thinking. nnAns: nnd nnResponse: nnp. nn4
, 4) Which nnof nnthe nnfollowing nnis nna nntypical nncharacteristic nnof nnheuristics?
a. They nnprovide nnus nnwith nna nnsimple nnway nnof nndealing nnwith nncomplex nnproblems.
b. They nnhave nnthe nnbest nnlikelihood nnof nnreaching nnan nnoptimal nnsolution nnto nna nnproblem.
c. They nnare nntime nnand nnresource nnconsuming.
d. They nnare nnused nnmainly nnby nnirrational nndecision nnmakers.
Ans: nna
nn Response: nnp.
6
nn
Questions nn5-8 nndescribe nnexamples nnof nnheuristics nnoutlined nnin nnthe nnchapter. nnFor nneach nnquestion,
nnindicate nnwhich nnheuristic nnit nndescribes:
a. The nnrepresentativeness nnheuristic.
b. The nnavailability nnheuristic.
c. The nnconfirmation nnheuristic.
d. The nnaffect nnheuristic.
5) Inner nncity nncrime nnin nnthe nnU.S. nngets nnconsiderable nnmedia nncoverage, nnsuch nnthat nnevery
nnhomicide nnis nnreported nnin nnthe nnnews. nnIn nncontrast, nna nnstory nnof nna nnperson nnwho nndied
nnfrom nna nnheart nnattack nnrarely nnmakes nnthe nnnews. nnThis nnleads nnpeople nnto nnoverestimate
nnthe nnfrequency nnof nndeaths nndue nnto nnhomicides nnrelative nnto nnthose nndue nnto nnheart nnfailure.
Ans: nnb
nn Response: nnp.
7-8
nn
6) John nnis nnover nnseven nnfeet nntall. nnWhen nnasked nnwhether nnJohn nnis nna nnprofessional
nn basketball nnplayer nnor nna nnsoftware nnprogrammer, nnmany nnpeople nnpredict nnthe nnformer,
nn even nnthough nnthere nnare nnmany nnmore nnsoftware nnprogrammers, nneven nnvery nntall nnones,
nn than nnprofessional nnbasketball nnplayers. Ans: nna
Response: nnp. nn8-9
, 7) After nnreading nnabout nnthe nnpositive nneffect nnchocolate nnhas nnon nnstudent nnperformance, nna
nn teacher nngives nneach nnstudent nnin nna nnclass nna nnchocolate nnbar nnbefore nntaking nnan nnexam. nn15
nn out nnof nn22 nnstudents nnin nnthat nnclass nnget nnan nnA nnon nnthe nnexam. nnThe nnteacher nntherefore
nn concludes nnthat nnchocolate nnenhances nnperformance. nnAns: nnc
Response: nnp. nn9-10
8) A nncommon nnwisdom nnin nnpolitics nnis nnthat nnthe nnmore nnan nnargument nnis nnrepeated, nnthe
nnmore nnit nnwill nnbe nnconsidered nnby nnthe nnpublic nnas nnreliable nnand nntrue.
Ans: nnb
nn Response: nnp.
7-8
nn
9) The nnaffect nnheuristic nncan nnexplain nnwhy
a. People nnwho nnlive nnin nnCalifornia nnare nnassumed nnto nnbe nnhappier nnthan nnpeople
nnwho nnlive nnin nnthe nnMidwest.
b. Students nnpredict nnthey nnwill nnbe nnsadder nnafter nngetting nna nnbad nngrade nnon nna
nntest nnthan nnthey nnactually nnare nnin nnthese nnsituations.
c. People nndo nnnot nnremember nnsad nnevents nnfrom nntheir nnearly nnchildhood.
d. Stock nnprices nngo nnup nnon nnsunny nndays.
Ans: nnd
nn Response: nnp.
10
nn
True/False
10) Succumbing nnto nnheuristics nnis nninevitable, nnand nnthere nnis nnno nnway nnto nnmake nnjudgment
nnless nnprone nnthem. nnRather, nnone nncan nnonly nnbe nnaware nnof nnthe nnbiasing nneffect nnheuristics
nnhave nnon nnone’s nnjudgment.
Ans: nnFalse
nn Response: nnp.
11
nn
