University of Central Florida (UCF) QMB3602 Business Research for Decision Making Practice Exam 1

The 80/20 Rule, also known as the Pareto Principle, asserts that a relatively small percentage of causes (typically around 20%) is responsible for a large percentage (about 80%) of the results or effects. This principle is particularly useful in business and economics, where it illustrates that not all inputs or efforts yield equal outputs or benefits.

In this context, the correct choice indicates that 80% of results are generated by 20% of the inputs. This highlights the importance of identifying and focusing on the vital few inputs that are most impactful, as they can significantly influence outcomes. In many scenarios, this insight can help in prioritizing efforts, resources, and strategies to maximize effectiveness and efficiency in decision-making processes. Understanding this can empower individuals and organizations to concentrate their energy on the areas that will yield the highest returns.