Exam 8: Behavioral Economics

John's friend Rosika won a major lottery jackpot. Seeing this, John goes out and buys a bunch of lottery tickets despite struggling financially and even though he knows that millions don't win and that the odds of winning are infinitesimal. John's decision to buy the lottery tickets under these circumstances would best be explained by the

Augi carefully plans out an early morning exercise routine to lose weight and get fit. When it's time to work out, however, Augi just "doesn't feel up to it" and decides to sleep in. Behavioral economics would say that Augi

The fact that specific areas of the human brain deal with specific sensations and activities like hearing, speech, and breathing is referred to as brain

"Nudges" refer to

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

Behavioral economic theories are developed based on the following, except

That people tend to hold on to shares of stock well past the point where it makes sense to sell those shares can be explained in part by the

Rosa received a corgi pillow as a raffle prize; she would have been willing to pay $20 to buy it herself. Based on the endowment effect, we would expect Rosa to be willing to sell the pillow

In sunny parts of the country, solar panels generate net financial benefits in just a few years, despite having high installation costs. Despite their long-run profitability, the high upfront costs discourage many from installing solar panels. From a behavioral economics perspective, this is the result of

Neoclassical economics does not hold which of the following assumptions?

The BIT helped poor people in the Philippines increase their saving by offering "commitment" savings accounts that restricted withdrawals until certain dates or savings targets were reached. This is an example of

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

Which of the following cognitive biases refers to people's tendency to attribute their successes to personal ability and effort, and failures to forces outside their control?

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

Precommitments are a tool designed to overcome time inconsistency.

Why do credit card companies typically require small minimum payment amounts on their customers' monthly credit card statements?

Because gun violence is portrayed frequently on television and in movies, people mistakenly assign too high of a probability that they will fall victim to gun violence and too low of a probability of suffering from more likely but less publicized events. This phenomenon illustrates

Suppose Ryan and Rita were randomly shown the numbers 25 and 67, respectively, and then asked to estimate the price of an item about which they have relatively limited knowledge. According to findings from behavioral economics, we would expect

Which of the following is not an implication of hardwired heuristics?

Because neoclassical economists assume that people are rational decision makers, they