This quiz works best with JavaScript enabled. Home > Finance > Economics > Behavioral Economics > Behavioral Economics – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Behavioral Economics Quiz 5 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Bobby bought tickets to a concert but there is a bad snow storm. He decides to go anyway because he paid for it. This is A) Endowment Effect. B) Herd Mentality. C) Sunk Cost Fallacy. D) Overconfidence. Show Answer Correct Answer: C) Sunk Cost Fallacy. 2. A strategy used to combat loss aversion by imagining that overnight something you own has been replaced with cash, then determining whether you would prefer to keep the cash or buy the item back A) Overnight test. B) Sunk cost fallacy. C) Herd mentality. D) Cognitive bias. Show Answer Correct Answer: A) Overnight test. 3. Sunk costs are ..... A) Costs that will end in a product. B) What a producer pays to supply a product to a market. C) Costs that were part of a cruise ship that sunk. D) Costs that cannot be recovered. Show Answer Correct Answer: D) Costs that cannot be recovered. 4. The term 'Ordered preferences' is an assumption of traditional economic thinking where consumer behaviour is: A) Inconsistent over time. B) Not related to utility. C) Not based on rankings. D) Revealed when consumers act on their preferences by spending their income. Show Answer Correct Answer: D) Revealed when consumers act on their preferences by spending their income. 5. Separating money into imaginary categories in your mind A) Transaction Utility. B) Mental Accounting. C) Sunk Cost Fallacy. D) Confirmation Bias. Show Answer Correct Answer: B) Mental Accounting. 6. Which step requires you to consider your opportunity costs? A) Sift. B) Search. C) Study. D) None of above. Show Answer Correct Answer: A) Sift. 7. Which brands below are now able to sell items directly from within the instagram app? A) Toms and Supreme. B) Kylie Cosmetics and Adidas. C) Gucci and Balenciaga. D) Ray-Ban and Tommy Hilfiger. Show Answer Correct Answer: B) Kylie Cosmetics and Adidas. 8. What is a method of economic analysis that applies psychological insights into human behavior to explain economic decision-making A) Classical Economics. B) Behavioral Economics. Show Answer Correct Answer: B) Behavioral Economics. 9. With this technique we encourage the Client to make their best effort since their credit is about to expire: A) Risk aversion. B) Cognitive overload. C) Gradient Meta Effect. D) Sunk cost. Show Answer Correct Answer: C) Gradient Meta Effect. 10. The tendency to process information by looking for, or interpreting, information that is consistent with one's existing beliefs A) Confirmation Bias. B) Loss Aversion. C) Mental Accounting. D) Overconfidence Bias. Show Answer Correct Answer: A) Confirmation Bias. 11. Which of the following is an example of how someone's PHYSICAL values can influence their financial decisions? A) Sophie likes to shop for clothes at the thrift store so that she can find good deals and save money. B) Ben puts 20% of his take home pay into a savings account, because that's what his mom does. C) Jessie gets a massage every month as a form of self-care. D) Anirudh has two job offers and decides to go with the one that will offer him more job satisfaction even though it pays less than the other job. Show Answer Correct Answer: C) Jessie gets a massage every month as a form of self-care. 12. The phenomenon where a person is reluctant to abandon a strategy or course of action because they have invested heavily in it, even when it is clear that abandonment would be more beneficial A) Endowment Effect. B) Sunk Cost Fallacy. C) Confirmation Bias. D) Bandwagon Effect. Show Answer Correct Answer: B) Sunk Cost Fallacy. 13. How has social media marketing evolved over the past few decades? A) Modern marketing utilizes extremely detailed user data to create personalized ads for each user. B) Modern marketing creates a less seamless shopping experience for consumers. C) Modern marketing makes it easy to distinguish advertising from other types of content. D) Modern marketing urges you to make financial decisions that align with your goals. Show Answer Correct Answer: A) Modern marketing utilizes extremely detailed user data to create personalized ads for each user. 14. What does the location of allocation of behavior among different options altered by constraints of instrumental conditioning procedure? A) Demande curve. B) Behavioral economics. C) Price range. D) Link to complementary commodities. Show Answer Correct Answer: A) Demande curve. 15. What year was Mrs. Hagan born? A) 1990. B) 1950. C) 1995. D) 1991. Show Answer Correct Answer: D) 1991. 16. The tendency to make decisions about a current situation based on what resources you have already invested in the situation. A) Herd Mentality. B) Confirmation Bias. C) Sunk Cost Fallacy. D) Endowment Effect. E) FOMO. Show Answer Correct Answer: C) Sunk Cost Fallacy. 17. Which of the following does not relate to the traditional economic viewpoint of business in the economy: A) Businesses act purely for their own benefit. B) Businesses do not reallocate resources to goods and services most being demanded. C) Businesses are interested at producing at the lowest possible cost. D) Businesses are motivated by profit maximisation. Show Answer Correct Answer: B) Businesses do not reallocate resources to goods and services most being demanded. 18. Physical Values are ..... A) Our personal identity (how we see ourselves) and our social identity (how we believe others see us). B) The tangible aspects of life, the external world, our physical health and well-being. C) Principles that are important to you because of the community in which you live. D) Unrelated to how much money we actually have, these values reflect what we think or believe about money. Show Answer Correct Answer: B) The tangible aspects of life, the external world, our physical health and well-being. 19. Research shows that ..... of people make purchases because of FOMO. A) 90%. B) 25%. C) 60%. D) 45%. Show Answer Correct Answer: C) 60%. 20. How people can be influenced by their peers to adopt certain behaviors on a largely emotional, rather than rational basis. A) Fear of missing out. B) Confirmation bias. C) Herd mentatlity. D) Loss aversion. Show Answer Correct Answer: C) Herd mentatlity. 21. What is the average amount of money an American teenager spends on food and clothes each year? A) $ 4, 100. B) $ 1, 200. C) $ 5, 000. D) $ 2, 600. Show Answer Correct Answer: D) $ 2, 600. 22. What is the endowment effect? 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. D) Assigning more value to things we already own. Show Answer Correct Answer: D) Assigning more value to things we already own. 23. Choose the cognitive bias that is described below:People are influenced to think an item is cheap when it's placed beside/near an item that is more expensive (also called an "anchor") A) Loss aversion. B) Anchoring. C) Bandwagon effect. D) Sunk Cost Bias. Show Answer Correct Answer: B) Anchoring. 24. True/False:The tendency to search for information that supports our preconceptions and to ignore or distort contradictory evidence-sunk cost fallacy A) False. B) True. Show Answer Correct Answer: A) False. 25. Considers that a broad range of activities are always available to an individual A) Premark principle. B) Response-deprivation hypothesis. C) Response allocation. D) Behavioral economics. Show Answer Correct Answer: C) Response allocation. 26. Investing in low-return, guaranteed investments over more promising investments that carry higher risk. A) Loss aversion. B) Confirmation bias. C) Herd mentality. D) Sunk costs. Show Answer Correct Answer: A) Loss aversion. 27. Choose the cognitive bias that is described below:People fear loss more than they admire gain. Even if the probabilities are the same, they would tend towards an option where loss is minimal or 0. A) Loss aversion. B) Bandwagon Effect. C) Endowment Bias. D) Sunk Cost Bias. Show Answer Correct Answer: A) Loss aversion. 28. You go to the Jersey shore on most weekends. Then you visit that same beach on a Wednesday. You notice that the waves that Wednesday not as big as when you visit on the weekend. You're convinced that weekend waves are bigger than weekday waves. What kind of economic behavior is this? A) The Endowment Effect. B) Mental Accounting. C) Confirmation Bias. D) Loss Aversion. Show Answer Correct Answer: C) Confirmation Bias. 29. Its use is key to the development of our daily relationships as it helps us maintain effective communication. A) Linguistic intelligence. B) Emotional intelligence. C) IReNe Principles. D) None of above. Show Answer Correct Answer: A) Linguistic intelligence. 30. Costs that have already been incurred and cannot be recovered A) Losing Costs. B) Sunk Costs. C) Flying Costs. D) Drowning Costs. Show Answer Correct Answer: B) Sunk Costs. ← PreviousNext →Related QuizzesEconomics QuizzesFinance QuizzesBehavioral Economics Quiz 1Behavioral Economics Quiz 2Behavioral Economics Quiz 3Behavioral Economics Quiz 4Behavioral Economics Quiz 6Behavioral Economics Quiz 7Behavioral Economics Quiz 8Behavioral Economics Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books