Exam 10: An Introduction to Behavioral Economics

________ is the tendency to experience losses as more painful than the pleasures that result from gains of the same magnitude:

According to the availability heuristic, we often estimate the frequency of an event by:

Government programs aimed at stimulating personal savings:

Last week, Gina's bakery sold fewer cupcakes than ever before. Regression to the mean implies that the bakery:

The fact that people sometimes regret having made a decision with perfectly predictable consequences:

The ________ assumes that people choose efficient means to achieve their ends, but it regards goals as objects of choice that are subject to a similar efficiency requirement.

If people care about relative consumption rather than absolute consumption, then:

Typically, when people use anchoring and adjustment to estimate something, the importance of ________ in influencing their assessment is too large.

Suppose Alyssa is willing to drive across town to save 50 percent on a soccer ball with a list price of $40. If Alyssa is rational, this implies that she should:

Corey is having difficulty deciding between two dishwashers, A and B. As shown in the accompanying diagram, A makes more noise than B, but is cheaper. Ideally, Corey would like a dishwasher that is both quiet and inexpensive. If Corey behaves like most decision-makers, then the addition of option C would:

Widespread behavioral evidence suggests that people:

When it comes to enacting policy changes, loss aversion often leads to status quo bias because:

Brandon is having difficulty deciding between two jobs, X and Y. As shown in the accompanying diagram, X entails a greater risk of injury than Y, but pays more. Ideally, Brandon would like a job that both pays well and does not entail a high risk of injury.   If Brandon behaves like most decision-makers, then the addition of option Z would:

The adaptive rationality standard:

Suppose that 90 percent of women who are Krista's age do not have high cholesterol and 10 percent do. If a cholesterol test indicates that Krista has high cholesterol, but the test is only accurate 80 percent of the time, then the probability that Krista really does have high cholesterol is roughly:

Suppose you would have to pay Troy at least $12 to get him to part with his new water bottle. Loss aversion implies that if Troy had not yet purchased the water bottle, he would:

The relationship according to which the perceived change in any stimulus varies according to the size of the change measured as a proportion of the original stimulus is known as:

Kendra is having difficulty deciding between two cars, A and B. As shown in the accompanying diagram, A has more cargo room than B, but lower gas mileage. Ideally Kendra would like a car both with a lot of cargo room and good gas mileage.    If Kendra behaves like most decision-makers, then the addition of option C would:

The tendency to experience losses as more painful than the pleasures that result from gains of the same magnitude is known as:

The rule of thumb according to which people are more likely to assume something belongs to a given category if it shares many characteristics with the stereotypical members of that category is the: