This quiz works best with JavaScript enabled. Home > Economics > Behavioral Economics > Behavioral Economics – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Behavioral Economics Quiz 4 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What did Richard Thaler win the Nobel Prize for? A) Proving that humans make financial mistakes. B) Predicting money mistakes. C) Studying the endowment effect. D) Researching mental accounting. Show Answer Correct Answer: A) Proving that humans make financial mistakes. 2. According to a 2018 Survey, what percentage of U.S. teens say they are Instagram users? A) 89. B) 72. C) 65. D) 48. Show Answer Correct Answer: B) 72. 3. Rational Decision Making is a theory of economics that assumes that individuals always make decisions that provide them with the highest amount of personal utility. These decisions provide people with the greatest benefit or satisfaction given the choices available A) True. B) False. Show Answer Correct Answer: A) True. 4. Loss aversion refers to A) Describes why the pain of losing is psychologically twice as powerful as the pleasure of gaining. B) Describes our tendency to be more willing to pay when there is no physical money involved. C) Sentimentality for days gone by lead us to place increased value on social connectedness and less value on saving money. D) Describes how we tend to avoid options that we consider to be missing information. Show Answer Correct Answer: A) Describes why the pain of losing is psychologically twice as powerful as the pleasure of gaining. 5. Which statement about multi-branding is incorrect: A) It is a strategy to help achieve profit-maximisation. B) It aims to increase the number of products in the market. C) It is a way of increasing 'barriers to entry'. D) It helps overcome problems associated with 'brand switching'. Show Answer Correct Answer: C) It is a way of increasing 'barriers to entry'. 6. The tendencey to put more value on the things you already own is the endowment effect? A) True. B) False. Show Answer Correct Answer: A) True. 7. An increase in price has less of an effect at low prices than at high prices A) Link to complementary commodity. B) Income level. C) Price range. D) Availability of substitute. Show Answer Correct Answer: C) Price range. 8. Cognitive Bias is ..... A) The belief that our abilities are better than they actually are. B) The desire to seek out information that confirms our existing beliefs. C) The concept of placing more value on an item when we own it. D) An error in the way we think that can influence our decisions. Show Answer Correct Answer: D) An error in the way we think that can influence our decisions. 9. This technique consists of changing the attitude of rejection that is experienced in the face of financial risk, specifically in the face of the possibility of suffering losses in one's credit or in one's economy in general instead of making decisions to obtain benefits: A) Sunk cost. B) Gradient Meta Effect. C) Risk aversion. D) Cognitive overload. Show Answer Correct Answer: C) Risk aversion. 10. Sebastian began day trading stocks at the beginning of the summer. After a month, he made a profit of $ 200. Due to his short term success and his belief that he is a highly skilled trader, Sebastian puts his entire savings into the market. This is an example of A) Overconfidence Bias. B) The Fear of Missing Out (FOMO). C) Confirmation Bias. D) The Endowment Effect. Show Answer Correct Answer: A) Overconfidence Bias. 11. Bandwagon Effect refers to A) Doing something others are doing. B) A traveling band. C) Buying a product that can be sold for a lower price. D) How much you could obtain for an item at a later time. Show Answer Correct Answer: A) Doing something others are doing. 12. Herd mentality may explain why ..... A) Ben bought a shirt he liked from an unpopular brand. B) Davona chose to skip dinner with her friends and watched a movie at home instead. C) Ginnifer decided to keep her current phone even though her closest friends bought the new version. D) Mason went to see a movie with his friends even though he didn't like the genre. Show Answer Correct Answer: D) Mason went to see a movie with his friends even though he didn't like the genre. 13. They help us contribute to customer recovery and recommendation A) Use effective negotiation techniques. B) Apply IReNe principles. C) Send to survey on all calls. D) None of above. Show Answer Correct Answer: B) Apply IReNe principles. 14. Picking a restaurant that is more crowded over another because you are assuming that the food and service is better there. A) Confirmation bias. B) Herd mentatlity. C) Fear of missing out. D) Loss aversion. Show Answer Correct Answer: B) Herd mentatlity. 15. The tendency for positive impressions of a person, company, brand or product in one area to positively influence one's opinion or feelings in other areas A) Priming. B) Regret aversion. C) Endowment effect. D) Halo effect. Show Answer Correct Answer: D) Halo effect. 16. Your friend gives you an item. A day later, they offer to trade you another item of similar value. According to the endowment effect, most people would keep the item ..... A) They were offered second. B) They could sell for the most. C) They received first. D) They think looks the best. Show Answer Correct Answer: C) They received first. 17. A bat and a ball cost $ 1.10. The bat costs one dollar more than the ball. How much does the ball cost? A) 15 cents. B) 10 cents. C) 5 cents. D) 20 cents. Show Answer Correct Answer: C) 5 cents. 18. Which step requires you to identify the need or want? A) Select. B) Specify. C) Sift. D) None of above. Show Answer Correct Answer: B) Specify. 19. Investments of time, effort, and money that cannot be recovered are ..... A) Opportunity costs. B) Sunk costs. C) Relevant costs. D) Avoidale costs. Show Answer Correct Answer: B) Sunk costs. 20. In 2021, many people saw the value of Gamestop stock increasing sharply and purchased the stock too. These buyers were A) Experiencing Herd Mentality. B) Experiencing Overprecision. C) Experiencing Confirmation Bias. D) Experiencing Hedonic Adaptation. Show Answer Correct Answer: A) Experiencing Herd Mentality. ← PreviousNext →Related QuizzesEconomics QuizzesBehavioral Economics Quiz 1Behavioral Economics Quiz 2Behavioral Economics Quiz 3Behavioral Economics Quiz 5Behavioral Economics Quiz 6Behavioral Economics Quiz 7Behavioral Economics Quiz 8Behavioral Economics Quiz 9Behavioral Economics Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books