Question 1

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

Accepted Answer

A) is a rare event. 
B) occurs frequently. 
C) is small in proportion to the original stimulus. 
D) is large in proportion to the original stimulus. 
A) is a rare event. 
B) occurs frequently. 
C) is small in proportion to the original stimulus. 
D) is large in proportion to the original stimulus.

Question 2

The ultimatum bargaining game is a game in which:

Accepted Answer

A) the second player doesn't know the strategy choice of the first player. 
B) the first player confronts the second player with a take-it-or-leave-it offer. 
C) both players have a dominant strategy to cheat the other player. 
D) both players give each other an ultimatum. 
A) the second player doesn't know the strategy choice of the first player. 
B) the first player confronts the second player with a take-it-or-leave-it offer. 
C) both players have a dominant strategy to cheat the other player. 
D) both players give each other an ultimatum.

Question 3

Natasha is having difficulty deciding between two jobs, A and B. As shown in the accompanying diagram, A is closer to home than B, but doesn't pay as well. Ideally, Natasha would like a job that both pays well and is close to her home.   If Natasha behaves like most decision-makers, then the addition of option C would:

Accepted Answer

A) decrease her likelihood of accepting any job. 
B) have no impact on her choice of A and B. 
C) increase her likelihood of picking A. 
D) increase her likelihood of picking B. 
A) decrease her likelihood of accepting any job. 
B) have no impact on her choice of A and B. 
C) increase her likelihood of picking A. 
D) increase her likelihood of picking B.

Question 4

If a Proposer and a Responder are asked to split $100 in the ultimatum bargaining game, standard economic theory would predict that the Responder should:

Accepted Answer

A) reject any amount over $50. 
B) accept any amount offered by the Proposer. 
C) reject any amount less than $50. 
D) only accept an offer for exactly $50. 
A) reject any amount over $50. 
B) accept any amount offered by the Proposer. 
C) reject any amount less than $50. 
D) only accept an offer for exactly $50.

Question 5

Traditional economic models cannot explain why:

Accepted Answer

A) some people buy expensive cars and others buy cheap cars. 
B) people leave tips at restaurants where they regularly dine. 
C) people donate money to charity completely anonymously. 
D) people buy more of certain goods when their income falls. 
A) some people buy expensive cars and others buy cheap cars. 
B) people leave tips at restaurants where they regularly dine. 
C) people donate money to charity completely anonymously. 
D) people buy more of certain goods when their income falls.

Question 6

The phenomenon that unusual events are likely to be followed by more nearly normal is known as:

Accepted Answer

A) the adaptive rationality standard. 
B) regression to the mean. 
C) anchoring and adjustment. 
D) fungibility. 
A) the adaptive rationality standard. 
B) regression to the mean. 
C) anchoring and adjustment. 
D) fungibility.

Question 7

According to the adaptive rationality standard, individuals:

Accepted Answer

A) are irrational if they choose to have preferences that are not self-interested. 
B) always behave according to their own narrow self-interest. 
C) are unable to choose what kind of preferences to have. 
D) might rationally choose to have preferences that are not self-interested. 
A) are irrational if they choose to have preferences that are not self-interested. 
B) always behave according to their own narrow self-interest. 
C) are unable to choose what kind of preferences to have. 
D) might rationally choose to have preferences that are not self-interested.

Question 8

In situations where people make decisions with perfectly predictable consequences, traditional economic models cannot explain:

Accepted Answer

A) why people experience regret. 
B) how people maximize their utility. 
C) how risk aversion influences decisions. 
D) what the rational choice should be. 
A) why people experience regret. 
B) how people maximize their utility. 
C) how risk aversion influences decisions. 
D) what the rational choice should be.

Question 9

________ is an estimation technique that begins with an initial approximation, which is then modified in accordance with additional information.

Accepted Answer

A) The adaptive rationality standard 
B) Status quo bias 
C) Regression to the mean 
D) Anchoring and adjustment 
A) The adaptive rationality standard 
B) Status quo bias 
C) Regression to the mean 
D) Anchoring and adjustment

Question 10

According to the Weber-Fechner law, the perceived change in any stimulus:

Accepted Answer

A) does not depend on the size of the change in proportion to the original stimulus. 
B) is larger when the change is large in proportion to the original stimulus. 
C) is larger when the change is small in proportion to the original stimulus. 
D) is zero regardless of the size of the original stimulus. 
A) does not depend on the size of the change in proportion to the original stimulus. 
B) is larger when the change is large in proportion to the original stimulus. 
C) is larger when the change is small in proportion to the original stimulus. 
D) is zero regardless of the size of the original stimulus.

Question 11

Loss aversion is the tendency to experience losses as:

Accepted Answer

A) just as painful as the pleasures that result from gains of the same magnitude. 
B) more painful than the pleasures that result from gains of the same magnitude. 
C) less painful than the pleasures that result from gains of the same magnitude. 
D) more painful than gains of any magnitude. 
A) just as painful as the pleasures that result from gains of the same magnitude. 
B) more painful than the pleasures that result from gains of the same magnitude. 
C) less painful than the pleasures that result from gains of the same magnitude. 
D) more painful than gains of any magnitude.

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

The ultimatum bargaining game is a game in which:

If a Proposer and a Responder are asked to split $100 in the ultimatum bargaining game, standard economic theory would predict that the Responder should:

Traditional economic models cannot explain why:

The phenomenon that unusual events are likely to be followed by more nearly normal is known as:

According to the adaptive rationality standard, individuals:

In situations where people make decisions with perfectly predictable consequences, traditional economic models cannot explain:

________ is an estimation technique that begins with an initial approximation, which is then modified in accordance with additional information.

According to the Weber-Fechner law, the perceived change in any stimulus:

Loss aversion is the tendency to experience losses as:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Elasticity

Demand

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

Externalities, Property Rights, and the Environment

The Economics of Information

Labor Markets, Poverty, and Income Distribution

Public Goods and Tax Policy

International Trade and Trade Policy

Macroeconomics: The Birds Eye View of the Economy

Measuring Economic Activity: GDP and Unemployment

Measuring the Price Level and Inflation

Economic Growth, Productivity, and Living Standards

The Labor Market: Workers, Wages, and Unemployment

Saving and Capital Formation

Money Prices and the Federal Reserve

Financial Markets and International Capital Flows

Short-Term Economic Fluctuations: An Introduction

Spending and Output in the Short Run

Stabilizing the Economy: The Role of the Fed

Aggregate Demand, Aggregate Supply, and Inflation

Exchange Rates and the Open Economy

Filters

Exam 10: An Introduction to Behavioral Economics

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

The ultimatum bargaining game is a game in which:

If a Proposer and a Responder are asked to split $100 in the ultimatum bargaining game, standard economic theory would predict that the Responder should:

Traditional economic models cannot explain why:

The phenomenon that unusual events are likely to be followed by more nearly normal is known as:

According to the adaptive rationality standard, individuals:

In situations where people make decisions with perfectly predictable consequences, traditional economic models cannot explain:

________ is an estimation technique that begins with an initial approximation, which is then modified in accordance with additional information.

According to the Weber-Fechner law, the perceived change in any stimulus:

Loss aversion is the tendency to experience losses as:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Elasticity

Demand

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

Externalities, Property Rights, and the Environment

The Economics of Information

Labor Markets, Poverty, and Income Distribution

Public Goods and Tax Policy

International Trade and Trade Policy

Macroeconomics: The Birds Eye View of the Economy

Measuring Economic Activity: GDP and Unemployment

Measuring the Price Level and Inflation

Economic Growth, Productivity, and Living Standards

The Labor Market: Workers, Wages, and Unemployment

Saving and Capital Formation

Money Prices and the Federal Reserve

Financial Markets and International Capital Flows

Short-Term Economic Fluctuations: An Introduction

Spending and Output in the Short Run

Stabilizing the Economy: The Role of the Fed

Aggregate Demand, Aggregate Supply, and Inflation

Exchange Rates and the Open Economy

Filters