Exam 8: Behavioral Economics

Fatal automobile accidents occur much more frequently than do fatal airplane crashes, yet airplane crashes receive a disproportionate amount of media coverage.As a result, some people are overly fearful of flying in planes yet have no problem riding in cars.Which of the following cognitive biases best explains this disconnect between these people's fears and the statistical realities?

The oft heard "I knew it all along" comment that many people make illustrates the

In the financial crisis that precipitated the 2007-2009 recession, people systematically overestimated their prospects for financial gain.Which branch of economics would most likely have expected to predict this?

Which of the following statements about behavioral economics is not true?

Behavioral economics demonstrates that the threat of rejection makes people less likely to engage in transactions.

According to behavioral economists, people tend to put too much weight on the future when they make decisions.

Neoclassical economists generally believe which of the following about human behavior?

Behavioral economists have found that one major explanation for the intercountry differences in participation rates in organ-donation programs is

Time inconsistency refers to the persistent underestimation of how long a task will take to perform.

Some behavioral economists explain the so-called endowment effect to be a consequence of people's tendency to

The tendency of people to overestimate the value of their possessions when, say, considering such value for insurance purposes is known in prospect theory as the

The status quo effect suggests that giving people more options is always good for them.

The tendency of people to misjudge, at the present time, what they will want to do or have at some future time is called

Specialty shops can charge and get customers to pay higher prices for identical goods than they would pay in "big box" stores.Assuming that these differences are driven by store appearance rather than differences in services provided, which of the following best explains this phenomenon?

"Heuristics" used by the human brain are one of the reasons why

Bucky and Satchel are offered identical jobs, each paying $80,000 per year.According to behavioral economics,

Behavioral economists criticize neoclassical models as being

Behavioral economists put significant emphasis on using models to

Neoclassical economics assumes that people have the following characteristics, except

One consequence of the confirmation bias is that many people believe that they could "beat the (stock) market."