CMAT Critical Thinking and Decision Making — Questions and Answers

Question 1: Which of the following best describes the concept of 'critical thinking'?

Memorizing facts and information for quick recall
Evaluating arguments and evidence to form well-reasoned judgments (Correct answer)
Following established procedures without questioning them
Accepting information provided by authority figures

Correct answer: Evaluating arguments and evidence to form well-reasoned judgments

Critical thinking is the objective analysis and evaluation of an issue in order to form a judgment, rather than passively accepting information.

Question 2: In decision making, 'bounded rationality' refers to:

Making decisions with unlimited and perfect information
Using only mathematical models to reach decisions
Making decisions within the limits of available information and cognitive capacity (Correct answer)
Always selecting the mathematically optimal solution

Correct answer: Making decisions within the limits of available information and cognitive capacity

Bounded rationality, coined by Herbert Simon, recognizes that decision makers operate with limited information, time, and cognitive resources rather than perfect rationality.

Question 3: Project A has a 70% chance of earning $100,000 and a 30% chance of losing $50,000. What is the expected monetary value of Project A?

$50,000
$55,000 (Correct answer)
$70,000
$85,000

Correct answer: $55,000

Expected value = (0.70 × $100,000) + (0.30 × −$50,000) = $70,000 − $15,000 = $55,000.

Question 4: Which decision-making model assumes that decision makers have complete information and always select the best possible option?

Bounded rationality model
Intuitive model
Rational model (Correct answer)
Political model

Correct answer: Rational model

The rational model assumes perfect information, clear objectives, evaluation of all alternatives, and selection of the optimal solution—an idealized approach rarely achievable in practice.

Question 5: 'Confirmation bias' in decision making refers to the tendency to:

Seek information that confirms pre-existing beliefs (Correct answer)
Confirm decisions through multiple stakeholder reviews
Use statistical methods to validate a hypothesis
Follow a structured multi-step confirmation process

Correct answer: Seek information that confirms pre-existing beliefs

Confirmation bias is the tendency to search for, interpret, and recall information in a way that confirms one's pre-existing beliefs, leading to poor decision quality.

Question 6: Which analytical tool helps decision makers evaluate options under uncertainty by mapping out possible choices and their outcomes?

Gantt chart
SWOT analysis
Decision tree (Correct answer)
Fishbone diagram

Correct answer: Decision tree

A decision tree is a diagram that maps possible decisions, their outcomes, and associated probabilities, helping managers evaluate alternatives under uncertainty.

Question 7: The 'devil's advocate' approach in group decision making is used to:

Delay the decision-making process indefinitely
Challenge the prevailing view to improve the quality of analysis (Correct answer)
Appoint a single person to make all final decisions
Avoid interpersonal conflict within the group

Correct answer: Challenge the prevailing view to improve the quality of analysis

The devil's advocate approach assigns someone to critique the dominant solution, forcing the group to examine assumptions and improve the quality of the final decision.

Question 8: Which of the following best illustrates 'groupthink' in an organizational setting?

A team thoroughly debates all options before reaching a decision
Team members suppress dissenting views to maintain group harmony (Correct answer)
A manager makes a unilateral decision without consulting others
A group uses a formal voting process to resolve disagreements

Correct answer: Team members suppress dissenting views to maintain group harmony

Groupthink occurs when the desire for group harmony overrides realistic appraisal of alternatives, causing members to suppress doubts and conform to the apparent consensus.

Question 9: In critical thinking, an 'ad hominem' fallacy occurs when:

An argument attacks the person making it rather than addressing the argument itself (Correct answer)
Statistical data is used incorrectly to support a claim
Two unrelated events are linked as if one caused the other
An argument appeals to the popularity of an idea as proof of its truth

Correct answer: An argument attacks the person making it rather than addressing the argument itself

An ad hominem fallacy occurs when someone attacks the character or circumstances of the person making an argument rather than addressing the argument's actual merits.

Question 10: Which problem-solving technique involves generating a large number of ideas without initial judgment or criticism?

Root cause analysis
Brainstorming (Correct answer)
Cost-benefit analysis
Delphi method

Correct answer: Brainstorming

Brainstorming is a creative technique where participants generate a large number of ideas freely, with evaluation deferred to a later stage to encourage creativity and volume.

Question 11: A manager notices that sales dropped after launching a new marketing campaign and concludes the campaign caused the drop. What logical error has been committed?

Straw man fallacy
False dichotomy
Post hoc ergo propter hoc (Correct answer)
Appeal to authority

Correct answer: Post hoc ergo propter hoc

Post hoc ergo propter hoc is the fallacy of assuming that because one event followed another, the first must have caused the second, without establishing actual causation.

Question 12: The 'Pareto Principle' (80/20 rule) applied to decision making suggests that:

80% of managers make poor decisions 20% of the time
20% of causes produce approximately 80% of effects (Correct answer)
Decisions should be reviewed every 80 days
80% of problems require only 20% of total available resources

Correct answer: 20% of causes produce approximately 80% of effects

The Pareto Principle states that roughly 80% of effects come from 20% of causes, helping managers focus attention and resources on the most impactful factors.

Question 13: In decision making under risk, which technique calculates the average outcome by weighting each scenario by its probability?

Maximin criterion
Maximax criterion
Expected Monetary Value (EMV) (Correct answer)
Minimax regret

Correct answer: Expected Monetary Value (EMV)

Expected Monetary Value (EMV) is calculated by multiplying the value of each outcome by its probability and summing all products, providing an average outcome across all scenarios.

Question 14: Which of the following best represents 'lateral thinking' as a problem-solving approach?

Following sequential, logical steps to arrive at a solution
Approaching problems from unexpected or creative angles (Correct answer)
Using historical data to predict and solve future problems
Applying a proven single best solution repeatedly across situations

Correct answer: Approaching problems from unexpected or creative angles

Lateral thinking, a term coined by Edward de Bono, involves approaching a problem from creative, indirect angles rather than through conventional step-by-step logic.

Question 15: The 'satisficing' approach to decision making, proposed by Herbert Simon, means:

Satisfying all stakeholders simultaneously before deciding
Choosing the optimal solution from all available options
Selecting the first acceptable solution rather than exhaustively seeking the best one (Correct answer)
Using satisfaction surveys to guide the decision-making process

Correct answer: Selecting the first acceptable solution rather than exhaustively seeking the best one

Satisficing refers to choosing a solution that is 'good enough' rather than searching exhaustively for the optimal one, recognizing practical limits of time and information.

Question 16: Which of the following is a key characteristic of 'wicked problems'?

They have a definitive and universally optimal solution
They can be solved using standard algorithms and procedures
They are complex, ill-defined challenges with conflicting stakeholder values (Correct answer)
They are simple recurring problems that follow predictable patterns

Correct answer: They are complex, ill-defined challenges with conflicting stakeholder values

Wicked problems are complex, ill-defined challenges with no single correct solution, often involving conflicting stakeholder values and incomplete or contradictory information.

Question 17: A 'SWOT analysis' is primarily used to:

Calculate key financial ratios for investor reporting
Assess an organization's strategic position relative to its environment (Correct answer)
Schedule and sequence project tasks and milestones
Measure and rank employee performance outcomes

Correct answer: Assess an organization's strategic position relative to its environment

SWOT analysis evaluates internal strengths and weaknesses alongside external opportunities and threats to support strategic decision making.

Question 18: Which of the following best represents 'divergent thinking'?

Arriving at a single correct answer through sequential logical steps
Evaluating a list of options based on predetermined scoring criteria
Generating multiple possible solutions to an open-ended problem (Correct answer)
Selecting the most efficient process from a set of existing options

Correct answer: Generating multiple possible solutions to an open-ended problem

Divergent thinking is a creative thought process that generates multiple ideas or solutions for an open-ended problem, contrasting with convergent thinking that seeks a single correct answer.

Question 19: In decision making, 'risk aversion' describes a preference for:

Maximizing expected value regardless of the variance of outcomes
Choosing uncertain options that offer higher potential returns
A certain outcome over an uncertain one with the same expected value (Correct answer)
Ignoring probability estimates in the decision-making process

Correct answer: A certain outcome over an uncertain one with the same expected value

A risk-averse decision maker prefers a certain outcome over a gamble with an equal or even slightly higher expected value, prioritizing security and predictability over potential gain.

Question 20: The 'Five Whys' technique is used in problem solving to:

Evaluate five strategic alternatives simultaneously
Identify the root cause of a problem by repeatedly asking 'why' (Correct answer)
Set five measurable performance targets for a project team
Rank five decision criteria in order of importance

Correct answer: Identify the root cause of a problem by repeatedly asking 'why'

The 'Five Whys' technique involves asking 'why' up to five times in succession to uncover the root cause of a problem, moving beyond surface-level symptoms.

Question 21: Which of the following represents a 'false dichotomy' fallacy?

Stating 'Either we cut costs or the company will fail' with no other options considered (Correct answer)
Presenting two opposing viewpoints for a balanced policy debate
Using statistical data to support two equally valid conclusions
Offering customers two product choices that are genuinely the only options available

Correct answer: Stating 'Either we cut costs or the company will fail' with no other options considered

A false dichotomy (or false dilemma) occurs when a situation is presented as having only two possible outcomes, ignoring other valid alternatives that exist.

CMAT Critical Thinking and Decision Making

Which of the following best describes the concept of 'critical thinking'?

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