CMAT Critical Thinking and Decision Making 1 — 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.
CMAT Critical Thinking and Decision Making 1
Which of the following best describes the concept of 'critical thinking'?