CMAT Critical Thinking and Decision Making

Question 1

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

Accepted Answer

Evaluating arguments and evidence to form well-reasoned judgments

Answer

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:

Accepted Answer

Making decisions within the limits of available information and cognitive capacity

Answer

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?

Accepted Answer

$55,000

Answer

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?

Accepted Answer

Rational model

Answer

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:

Accepted Answer

Seek information that confirms pre-existing beliefs

Answer

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.

CMAT - Common Management Admission Test Practice Test

CMAT - Common Management Admission Test Practice Test

CMAT Critical Thinking and Decision Making