Exam 10: An Introduction to Behavioral Economics

Eric brews beer for a hobby. He has noticed that whenever he brews an unusually bad batch of beer, his next batch is much better. One explanation for this is that Eric learns from his past mistakes. Another explanation is:

Suppose Bobby just watched a documentary about the massive decline in house prices during the Great Recession. According to the availability heuristic, this is likely to make Bobby:

One criticism of the present-aim standard of rationality is that it:

Suppose Whitney is willing to pay $200 to buy a new phone. Loss aversion implies that if Whitney already had just bought the phone, you would:

Suppose Danielle receives the highest grade in the class on the first exam in her economics course. Regression to the mean implies that Danielle:

Suppose Stephen's first novel makes the New York Times bestseller list. Regression to the mean implies that his second novel:

The present aim standard of rationality:

According to the representative heuristic, people are more likely to believe that something belongs to a given category if:

Evidence suggests that as the importance of what's at stake grows, loss aversion:

When people use anchoring and adjustment to estimate something, the adjustment they make when they receive new information is typically:

According to the Weber-Fechner law, when the change in a stimulus is large in proportion to the original stimulus, the perceived size of the change will be:

Suppose you would have to pay Alicia at least $150 to get her to part with a ticket she just bought to see her favorite band play next Friday. Loss aversion implies that if Alicia had not yet bought the ticket, she would:

Consider two coupons: one offers 10 percent off a pair of jeans that costs $100, and the other offers 50 percent off a pair of sunglasses that costs $20. Using either coupon requires driving to the shopping mall across town. According to the Weber-Fechner law, which coupon will people tend to perceive as being more valuable?

Judgmental and decision heuristics are:

According to the representative heuristic, people will tend to think that Karen is a vegetarian if:

Loss aversion is the tendency to:

Suppose one group of people is asked to imagine that, having previously purchased a ticket for $10, they arrive at the theater to discover they have lost their ticket, and a second group of people is asked to imagine that they arrive just before the performance to buy a ticket and find they have lost $10 from their wallets. According to the rational choice model, which group should be more likely to say they would still attend the performance?

The rule of thumb that estimates the frequency of an event by the ease with which it is possible to summon examples from memory is the:

A game in which the first player has the power to confront the second player with a take-it-or-leave-it offer is the:

According to the Weber-Fechner law, when the change in a stimulus is small in proportion to the original stimulus, the perceived size of the change will be: