Bayram had the opportunity to choose between two investments. The first investment was described as having a 30% chance of succe
eding, while the second investment was described as having a 70% chance of failing. Bayram opted for the first investment, because he thought it sounded less risky than the second investment. The chances of succeeding and failing are the same for the two investments, however, which implies that Bayram is subject to: overconfidence. a framing bias. a sunk cost fallacy. overvaluing the present relative to the future.
Framing bias occurs when a person chooses an option based on whether it was presented in positive or negative terms. There is tendency to avoid risk on positive presentation, and seek risk on negative presentation. It is a form of cognitive bias.
On this scenario Bayram is to choose between two investments. One was said to have 30% chance of success and the other a 70% chance of failure.
Although both investments have the same risk and benefit Bayram chose the one that was presented as 30% chance of success.
This phenomenon of choosing based on positive presentation is called framing bias.
B. GDP includes non market production and is therefore a good measure of a nation's overall welfare
Explanation:
A GDP is a total values of the goods and the services that are produced within a given country border and thus is the most common measure of measuring the country in terms of the size of the economy.
Thus can tell the health of the country and is the monetary value of all the goods and services. The non market activities include the production of the food at homes these services don't account for the in-country GDP.
