QUIZ
Behavioral Economics
35 minutes ago by
20 questions
Q.

You see an advertisement promoting a sale “for a limited time only!” with a countdown clock. Which bias is being used?

answer choices

Herd Mentality

Loss Aversion

Hedonic Adaptation

Fear of Missing Out (FOMO)

Q.

Behavioral economics is …

answer choices

The study of how rational people make economic decisions

The study of how irrational factors affect individual’s economic decisions

The study of how economies around the world interact with each other

The study of how investors choose which stocks to buy and sell

Q.

Guy bought tickets to a concert but there is a bad snow storm. He decides to go anyway because he paid for it. This is

answer choices

Sunk Cost Fallacy

Endowment Effect

Overconfidence

Herd Mentality

Q.

Ally signs up for a Netflix trial. Because she “owns” a full account, she places high value on it and signs up. This is

answer choices

Loss Aversion

Herd Mentality

Overprecision

The Endowment Effect

Q.

Peter can choose from two retirement accounts. Fearing a loss, he opts for the more conservative one. This is a type of

answer choices

Confirmation Bias

Overconfidence

Loss Aversion

Fear of Missing Out (FOMO)

Q.

Paula sees her friends' pictures of a concert that she couldn't attend because of work. She feels like an outsider.

answer choices

Paula is experiencing Fear of Missing Out (FOMO)

Paula is experiencing Herd Mentality

Paula is experiencing Loss Aversion

Paula is experiencing Confirmation Bias

Q.

Which of the following is an example of loss aversion?

answer choices

Selling your house at a loss to find a better investment opportunity

Believing that your house is worth more than it is because you own it

Deciding against selling your house below what you purchased it for

Only looking at sources that reinforce a higher selling value for your home

Q.

Confirmation bias is …

answer choices

The tendency to seek out information that supports our existing beliefs

The tendency to value something more because you own it

The belief that we are better at something than we actually are

The belief that we should do something because our friends are doing it

Q.

People who win the lottery tend to return to their original levels of happiness after the novelty of winning wears off.

answer choices

This is an example of the Endowment Effect

This is an example of Confirmation Bias

This is an example of Hedonic Adaptation

This is an example of Herd Mentality

Q.

The Fear of Missing Out, or FOMO, is…

answer choices

The effect of feeling a loss more than an equal gain

The anxiety that an interesting or exciting event is happening without you

Placing higher value on things you own

The opposite of YOLO (You Only Live Once)

Q.

The Endowment Effect is …

answer choices

Doing something because you see all of your friends doing it

Valuing something more because you own it

Returning to a baseline level of happiness after a major event

Continuing something because you have contributed resources to it

Q.

The irrational ways that we process information & make decisions using our own perspective and incomplete information.

answer choices

Cognitive biases

Hedonic Adaptation

The Endowment Effect

Overprecision

Q.

You are new to a city and find two restaurants near each other that offer a similar menu. You pick the more crowded one.

answer choices

This is an example of Fear of Missing Out (FOMO)

This is an example of Herd Mentality

This is an example of Sunk Cost Fallacy

This is an example of Overvaluing

Q.

Marie's car has needed over $2000 in repairs. She resists selling it because she has spent so much money. This is...

answer choices

The Endowment Effect

Confirmation Bias

Overconfidence Bias

Sunk Cost Fallacy

Q.

While researching Apple, Remy tends to focus on positive stories about their profits instead of stories about poor sales

answer choices

Remy is experiencing the Endowment Effect

Remy is experiencing Overconfidence Bias

Remy is experiencing Herd Mentality

Remy is experiencing Confirmation Bias

Q.

75% of drivers believe that they are above average. Which type of overconfidence is this an example of?

answer choices

Overestimation

Overplacement

Overprecision

Overvaluing

Q.

In 2021, many people saw the value of Gamestop stock increasing sharply and purchased the stock too. These buyers were

answer choices

Experiencing Herd Mentality

Experiencing Overprecision

Experiencing Confirmation Bias

Experiencing Hedonic Adaptation

Q.

Which of the following is an example of allowing sunk costs to impact your decision?

answer choices

Not selling a baseball card that you think is worth more because you own it

Continuing to watch a movie that you don’t like because you paid to see it

Selling a stock because you see the price drop and want to avoid losses

Buying a new phone because you see all of your friends have that it

Q.

Max believes his sense of direction is excellent and refuses to ask for directions. Which overconfidence is he showing?

answer choices

Overestimation

Overplacement

Overprecision

Oversimplifying

Q.

Overprecision is …

answer choices

The exaggerated certainty that our beliefs are correct

The overvaluing of our own abilities relative to everyone else

The belief that we are above average without supporting evidence

The expectation that other people place upon us to be accurate all the time

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