Question

Your two best friends each tell you about a person they know who successfully started a small business. That's it, you decide; if they can do it, so can you. This is an example of _____________. Multiple Choice mental accounting conservatism representativeness bias framing bias

Answer 1

Answer:

representativeness bias

Explanation:

Representativeness bias can be defined as a process which typically involves potential investors discarding or disregarding a sample size when constructing their views about the future based on past events or happenings.

In this scenario, your two best friends told you about a person they know who successfully started a small business. That's it, you decide; if they can do it, so can you without considering other factors associated with business.

Thus, this is is an example of representativeness bias.