This quiz works best with JavaScript enabled. Home > Finance > Economics > Behavioral Economics > Behavioral Economics – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Behavioral Economics Quiz 4 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Financial values are ..... A) Principles in life that are important to you. B) Principles that are important to you the community in which you live. C) The tangible aspects, the external world, physical health and well-being. D) These values reflect what we think or believe about money. Show Answer Correct Answer: D) These values reflect what we think or believe about money. 2. Informed decision is best described as: A) Having access to irrelevant and inaccurate information. B) Having 'imperfect information'. C) Being able to determine costs of decisions. D) Weighing up decisions to make choices that maximise satisfaction. Show Answer Correct Answer: D) Weighing up decisions to make choices that maximise satisfaction. 3. Going to the movies and realizing within the first 30 minutes that it's not going to be a good one. A) Confirmation bias. B) Fear of missing out. C) Sunk costs. D) Loss aversion. Show Answer Correct Answer: C) Sunk costs. 4. What is mental accounting? A) Refusing to sell something for more than we paid for it. B) Feeling the need to get 'our money's worth'. C) Separating money into imaginary categories in our mind. D) Assigning more value to things we already own. Show Answer Correct Answer: C) Separating money into imaginary categories in our mind. 5. Refers to an emotional bias that causes individuals to value an owned object higher, often irrationally, than its market value A) Fear of Missing Out (FOMO). B) Confirmation Bias. C) Loss Aversion. D) Endowment Effect. Show Answer Correct Answer: D) Endowment Effect. 6. You are shopping on Amazon for a new pair of shoes. You find the perfect pair, beneath the picture is text that says "Hurry! only 1 left in stock." Which loss aversion strategy is being used? A) Trials and Samples. B) Buy now, Get free. C) Scarcity and Urgency. D) Coupons. Show Answer Correct Answer: C) Scarcity and Urgency. 7. Which of these loss aversion strategies is being used in the hulu add (picture on the left)? A) Free Shipping. B) Coupons. C) Loss aversion. D) Free Trials and Samples. Show Answer Correct Answer: D) Free Trials and Samples. 8. The Fear of Missing Out, or FOMO, is ..... A) The opposite of YOLO (You Only Live Once). B) Placing higher value on things you own. C) The effect of feeling a loss more than an equal gain. D) The anxiety that an interesting or exciting event is happening without you. Show Answer Correct Answer: D) The anxiety that an interesting or exciting event is happening without you. 9. The tendency people have to be more confident in their own abilities A) Loss aversion. B) Overconfidence bias. C) Sunk cost fallacy. D) FOMO (fear of missing out). Show Answer Correct Answer: B) Overconfidence bias. 10. An "experiential purchase" is ..... A) Something that commemorates an experience, like a souvenir. B) Something that creates or enhances an experience or connects us with other people. C) Something that was made by hand rather than at a factory. D) Something that has a lot of monetary value. Show Answer Correct Answer: B) Something that creates or enhances an experience or connects us with other people. 11. Paula sees her friends' pictures of a concert that she couldn't attend because of work. She feels like an outsider. A) Paula is experiencing Confirmation Bias. B) Paula is experiencing Loss Aversion. C) Paula is experiencing Herd Mentality. D) Paula is experiencing Fear of Missing Out (FOMO). Show Answer Correct Answer: D) Paula is experiencing Fear of Missing Out (FOMO). 12. You are doing research on a new electric car that you are interested in buying. You only visit the car company's website and an online message board of electric car enthusiasts to do your research. This strategy may lead to ..... A) Confirmation bias. B) Loss aversion. C) The endowment effect. D) Herd mentality. Show Answer Correct Answer: A) Confirmation bias. 13. All of the following are types of overconfidence bias EXCEPT ..... A) Overprecision. B) Overgeneralization. C) Overestimation. D) Overplacement. Show Answer Correct Answer: B) Overgeneralization. 14. Amber gets her news from social media. Recently she has noticed that most of the people on her timeline share the same or similar types of articles. She mostly agrees with the news her friends share. What should Amber do to challenge her confirmation bias? A) Research other sources. B) Look beyond the posts her friends share or like. C) Look for articles that support different views on an issue. D) All of the above. Show Answer Correct Answer: D) All of the above. 15. Argues that you can use a high-probability response as a reinforcer of a low-probability response A) Premark principle. B) Response-deprivation hypothesis. C) Response allocation. D) Behavioral economics. Show Answer Correct Answer: A) Premark principle. 16. Sunk Cost Fallacy A) Sticking with something we've already put our time, money, and/or effort in. B) Something we've invested in was unsuccessful. C) Puting time, money, and effort in something. D) A cycle of repeated decisions economically. Show Answer Correct Answer: A) Sticking with something we've already put our time, money, and/or effort in. 17. The tendency to search for, interpret, favor and recall information in a what that confirms or supports one's prior beliefs or values. A) Herd mentality. B) Sunk costs. C) Loss aversion. D) Confirmation bias. Show Answer Correct Answer: D) Confirmation bias. 18. What is the term for feeling the need to get 'our money's worth'? A) The sunk cost fallacy. B) The endowment effect. C) Transaction utility. D) Mental accounting. Show Answer Correct Answer: A) The sunk cost fallacy. 19. It is when the Client takes a loss into account more than a gain: A) Cognitive Overload. B) Loss aversion. C) Confirmation bias. D) Present bias. Show Answer Correct Answer: B) Loss aversion. 20. Buy now, get it % off A) Pressures you to buy it since its in a limited window of opportunity. B) Tricks you into not giving you anyhing a % off. Show Answer Correct Answer: A) Pressures you to buy it since its in a limited window of opportunity. 21. What is the main idea behind behavioral economics? A) Humans make predictable financial mistakes. B) Humans always make the best financial decisions. C) Humans can remove emotions from decision-making. D) Humans are perfectly rational beings. Show Answer Correct Answer: A) Humans make predictable financial mistakes. 22. Confirmation bias is ..... A) The tendency to seek out information that supports our existing beliefs. B) The tendency to value something more because you own it. C) The belief that we are better at something than we actually are. D) The belief that we should do something because our friends are doing it. Show Answer Correct Answer: A) The tendency to seek out information that supports our existing beliefs. 23. While researching Apple, Remy tends to focus on positive stories about their profits instead of stories about poor sales A) Remy is experiencing Overconfidence Bias. B) Remy is experiencing the Endowment Effect. C) Remy is experiencing Confirmation Bias. D) Remy is experiencing Herd Mentality. Show Answer Correct Answer: C) Remy is experiencing Confirmation Bias. 24. All of the following are types of values that can impact your financial decisions EXCEPT ..... A) Inner values. B) Physical values. C) Social values. D) Spiritual values. Show Answer Correct Answer: D) Spiritual values. 25. Buy now get it tomorrow is common loss aversion strategy found on webistes A) False. B) True. Show Answer Correct Answer: B) True. 26. Which of the following is an example of loss aversion? A) Believing that your house is worth more than it is because you own it. B) Selling your house at a loss to find a better investment opportunity. C) Only looking at sources that reinforce a higher selling value for your home. D) Deciding against selling your house below what you purchased it for. Show Answer Correct Answer: D) Deciding against selling your house below what you purchased it for. 27. The law of diminishing marginal utility states that: A) Total utility grows more rapidly with each additional unit consumed. B) Each additional unit of a good or service that is consumed generates less utility (satisfaction). C) The second unit of something consumed provides more satisfaction than the first. D) Each additional unit of a good or service that is consumed generates more utility (satisfaction). Show Answer Correct Answer: B) Each additional unit of a good or service that is consumed generates less utility (satisfaction). 28. Overconfidence bias may lead the majority of Americans to think that they are ..... A) Below average drivers. B) Extremely poor drivers. C) Average drivers. D) Above average drivers. Show Answer Correct Answer: D) Above average drivers. 29. Putting more value on an object you own for more than its actually worth is an example of ..... A) Confirmation bias. B) The Fear of Missing Out (FOMO). C) Endowment effect. D) Overconfidence. Show Answer Correct Answer: C) Endowment effect. 30. What is transaction utility? A) Separating money into imaginary categories. B) Assigning more value to things we already own. C) The mental pleasure or pain we get from feeling like we paid less or more than something's worth. D) Refusing to sell something for more than we paid for it. Show Answer Correct Answer: C) The mental pleasure or pain we get from feeling like we paid less or more than something's worth. ← PreviousNext →Related QuizzesEconomics QuizzesFinance QuizzesBehavioral Economics Quiz 1Behavioral Economics Quiz 2Behavioral Economics Quiz 3Behavioral Economics Quiz 5Behavioral Economics Quiz 6Behavioral Economics Quiz 7Behavioral Economics Quiz 8Behavioral Economics Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books