Question 1

Anchoring leads people to consider irrelevant information when making decisions.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements about the so-called "hedonic treadmill" is not true?

Accepted Answer

A) It is a consequence of the fact that our brains are wired to notice changes rather than states. 
B) An increase in consumption level will give a permanent increase in happiness. 
C) It is the reason wh y people across a wide spectrum of incomes are found to be equally happy. 
D) A one-shot increase in income will, in the long run, not affect people's sense of satisfaction. 
A) It is a consequence of the fact that our brains are wired to notice changes rather than states. 
B) An increase in consumption level will give a permanent increase in happiness. 
C) It is the reason wh y people across a wide spectrum of incomes are found to be equally happy. 
D) A one-shot increase in income will, in the long run, not affect people's sense of satisfaction.

Question 3

Internationally, participation differences in organ donation programs are mostly attributed to

Accepted Answer

A) cultural views. 
B) financial compensation for organ donors. 
C) what default option is set for participation or nonparticipation. 
D) living standards as measured by per capita GDP. 
A) cultural views. 
B) financial compensation for organ donors. 
C) what default option is set for participation or nonparticipation. 
D) living standards as measured by per capita GDP.

Question 4

Why do cereals marketers most prefer to have their brand occupy the shelf-space a foot or two below a typical adult's eye-level?

Accepted Answer

A) Because they know that adults typically look down when they go by the store shelves. 
B) Because that shelf-space is the lowest priced space they could occupy. 
C) Because it's a lot easier to restock those shelf-spaces. 
D) Because they are targeting the children who go shopping with adults. 
A) Because they know that adults typically look down when they go by the store shelves. 
B) Because that shelf-space is the lowest priced space they could occupy. 
C) Because it's a lot easier to restock those shelf-spaces. 
D) Because they are targeting the children who go shopping with adults.

Question 5

Between System 1 and System 2 in the brain, System 1 makes most of the decisions.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is the best example of a System 2 decision and action?

Accepted Answer

A) Marty learns that his usual driving route to work will have significant delays due to construction but forgets and goes that way anyway. 
B) Doug eats a whole plate of nachos despite the fact it compromises his carefully planned diet. 
C) Bruce "goes with his gut" when choosing between two kinds of motorcycles to purchase. 
D) Chuck, who has contemplated a job change for a month and has other offers, chooses to quit when his boss makes him mad. 
A) Marty learns that his usual driving route to work will have significant delays due to construction but forgets and goes that way anyway. 
B) Doug eats a whole plate of nachos despite the fact it compromises his carefully planned diet. 
C) Bruce "goes with his gut" when choosing between two kinds of motorcycles to purchase. 
D) Chuck, who has contemplated a job change for a month and has other offers, chooses to quit when his boss makes him mad.

Question 7

According to behavioral economists, self-control problems

Accepted Answer

A) are a rare aberration from rational decision making. 
B) are often caused by time inconsistency. 
C) can be easily overcome by providing decision makers with better information. 
D) occur frequently but have no impact on the ability of neoclassical models to predict economic outcomes. 
A) are a rare aberration from rational decision making. 
B) are often caused by time inconsistency. 
C) can be easily overcome by providing decision makers with better information. 
D) occur frequently but have no impact on the ability of neoclassical models to predict economic outcomes.

Question 8

According to prospect theory, people tend to favor default options.This is known as the

Accepted Answer

A) self-serving bias. 
B) availability heuristic. 
C) status quo bias. 
D) framing bias. 
A) self-serving bias. 
B) availability heuristic. 
C) status quo bias. 
D) framing bias.

Exam 8: Behavioral Economics

Anchoring leads people to consider irrelevant information when making decisions.

Which of the following statements about the so-called "hedonic treadmill" is not true?

Internationally, participation differences in organ donation programs are mostly attributed to

Why do cereals marketers most prefer to have their brand occupy the shelf-space a foot or two below a typical adult's eye-level?

Between System 1 and System 2 in the brain, System 1 makes most of the decisions.

Which of the following is the best example of a System 2 decision and action?

According to behavioral economists, self-control problems

According to prospect theory, people tend to favor default options.This is known as the

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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