A woman comes to the doctor and says, "Doctor, I think I have cancer." The doctor checks it out. "It’s all in your head," the doctor says. "Phew," said the woman. "A bunch of tumors, all in your head."
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Explanation
The humor comes from a misunderstanding. The woman thinks 'it's all in your head' means she doesn't have cancer. The doctor uses 'it's all in your head' as a literal statement about the location of the tumors, which is a very bad diagnosis.