Question 1

Behavioral economists accept that people ___________ their well-being but sometimes ________________.

Accepted Answer

A)  try to maximize;make mistakes
B)  try to minimize;maximize it
C)  try to maximize;maximize their bad choices
D)  None of these statements is true.E) A) and C)
F) All of the above

Question 2

In the arena of decision making,status-quo bias means that the "'default'" option:

Accepted Answer

A)  has a lot of power.
B)  is most likely to be chosen.
C)  Is the one that will automatically take place if the chooser fails to make an active decision.
D)  All of these statements are true.E) B) and C)
F) B) and D)

Question 3

Suppose you were asked,"Can you guess the height of the tallest living man? Is it more than 8 feet?" When people suggest an answer in the question they ask,it is a form of:

Accepted Answer

A)  anchoring.
B)  rule of thumb.
C)  time inconsistency.
D)  positive framing.E) None of the above
F) All of the above A

Question 4

The success of the SMarT program has proven that changing the way we present options can:

Accepted Answer

A)  affect people's behavior.
B)  help them overcome mental biases.
C)  avoid regret.
D)  All of these statements are true.E) C) and D)
F) B) and C)

Question 5

A choice architect is someone who:

Accepted Answer

A)  is in a position to shape the decision-making environment.
B)  determines which choices are available to builders in a specific area.
C)  designs areas that have a lot of choices in determining how the space is used.
D)  None of these statements is true.E) C) and D)
F) None of the above

Question 6

The endowment effect is the tendency:

Accepted Answer

A)  to place a higher value on something a person already owns simply because they own it.
B)  to have a harder time parting with wealth people have held the longer the amount of time they hold it.
C)  for a person to believe they hold a particular skill because someone told them they do,regardless of who person is telling them.
D)  None of these statements is true.E) A) and B)
F) A) and C)

Question 7

Commitment devices are:

Accepted Answer

A)  methods to increase the price of your vices.
B)  methods to lower the price of your virtues.
C)  successful whether weak or strong,depending on the situation.
D)  All of these statements are true.E) B) and C)
F) B) and D)

Question 8

Suppose studies showed that 12 percent of all teens choose to participate in underage drinking.If policymakers wish to reduce the amount of underage drinking,they should:

Accepted Answer

A)  let teens know that the great majority of teens currently do not drink.
B)  not share that statistic,and let teens think that it's a huge problem with all teens.
C)  Informing them will have no impact on their individual behavior.
D)  The statistic is likely to influence their personal decision,but it is impossible to predict in what way without more information.E) B) and C)
F) All of the above A

Question 9

The Save More Tomorrow (SMarT) program is an example of a:

Accepted Answer

A)  weak commitment device that was successful.
B)  strong commitment device that was successful.
C)  weak commitment device that was unsuccessful.
D)  strong commitment device that was unsuccessful.E) A) and D)
F) A) and C) A

Question 10

If someone asked you to predict the price of gas in a month,and you decided to just guess by adding a few cents to the current price of gas,which you know,your answer would exhibit:

Accepted Answer

A)  anchoring.
B)  time inconsistency.
C)  rational expectations.
D)  None of these statements is true.E) B) and C)
F) A) and D)

Question 11

A mistake is a choice that:

Accepted Answer

A)  the chooser later regrets.
B)  the choice architect creates that has unintended consequences.
C)  society as a whole,but not necessarily the chooser,is left worse-off once it's made.
D)  policymakers think choosers should not make.E) B) and C)
F) A) and D)

Question 12

In the arena of decision making,the choice that will automatically take place if the chooser fails to make an active decision is called:

Accepted Answer

A)  status-quo bias.
B)  processing power bias.
C)  choice bias.
D)  auto bias.E) C) and D)
F) A) and B)

Question 13

A person cutting up their credit cards in an effort to curb their spending is an example of:

Accepted Answer

A)  a commitment device.
B)  status quo bias.
C)  the endowment effect.
D)  loss aversion.E) B) and D)
F) B) and C)

Question 14

We're more likely to make mistakes with situations we face:

Accepted Answer

A)  often,because we pay less attention.
B)  often,because they involve low payoffs.
C)  infrequently.
D)  with little warning.E) A) and C)
F) A) and D)

Question 15

Commitment devices can be:

Accepted Answer

A)  a tool to help people avoid temptation.
B)  an informal arrangement.
C)  formal policies set up through an employer or third party.
D)  All of these statements are true.E) B) and C)
F) None of the above

Question 16

Suppose studies showed that only 15 percent of all teens wear their bike helmets while riding their bikes.If policymakers wish to have more teens wear their bike helmets,they should:

Accepted Answer

A)  inform teens of the social norm.
B)  not inform teens of the social norm.
C)  Informing them of the social norm will have no impact on their individual situation.
D)  The statistic is likely to influence their personal decision,but it is impossible to predict in what way without more information.E) A) and C)
F) None of the above

Question 17

An example of a heuristic is:

Accepted Answer

A)  a rule of thumb.
B)  predatory lending.
C)  common sense.
D)  All of these are heuristics.E) B) and D)
F) B) and C)

Question 18

The concept of loss aversion is:

Accepted Answer

A)  a general tendency for people to put more effort into avoiding losses than achieving gains.
B)  preferring certain outcomes over uncertain ones.
C)  a general tendency for people to put more effort into achieving gains than avoiding losses.
D)  a spectrum of tolerance for risky situations.E) B) and D)
F) A) and B)

Question 19

Disclosing information in more usable ways to decision-makers:

Accepted Answer

A)  can nudge people toward making better decisions.
B)  effectively eliminates certain choices from a person's options.
C)  will never affect a person's decision.
D)  increases instances of rational ignorance.E) A) and D)
F) B) and D)

Question 20

When we study choice architecture,we recognize that people make:

Accepted Answer

A)  mistakes in common and predictable ways.
B)  choices that rarely maximize their well-being.
C)  mistakes in seemingly random ways.
D)  choices which always maximize their well-being.E) B) and C)
F) A) and D)

Exam 23: Public Policy and Choice Architecture

Behavioral economists accept that people ___________ their well-being but sometimes ________________.

Correct AnswerverifiedShow Answer

In the arena of decision making,status-quo bias means that the "'default'" option:

Correct AnswerverifiedShow Answer

Suppose you were asked,"Can you guess the height of the tallest living man? Is it more than 8 feet?" When people suggest an answer in the question they ask,it is a form of:

Correct AnswerverifiedA

The success of the SMarT program has proven that changing the way we present options can:

Correct AnswerverifiedShow Answer

A choice architect is someone who:

Correct AnswerverifiedShow Answer

The endowment effect is the tendency:

Correct AnswerverifiedShow Answer

Commitment devices are:

Correct AnswerverifiedShow Answer

Suppose studies showed that 12 percent of all teens choose to participate in underage drinking.If policymakers wish to reduce the amount of underage drinking,they should:

Correct AnswerverifiedA

The Save More Tomorrow (SMarT) program is an example of a:

Correct AnswerverifiedA

If someone asked you to predict the price of gas in a month,and you decided to just guess by adding a few cents to the current price of gas,which you know,your answer would exhibit:

Correct AnswerverifiedShow Answer

A mistake is a choice that:

Correct AnswerverifiedShow Answer

In the arena of decision making,the choice that will automatically take place if the chooser fails to make an active decision is called:

Correct AnswerverifiedShow Answer

A person cutting up their credit cards in an effort to curb their spending is an example of:

Correct AnswerverifiedShow Answer

We're more likely to make mistakes with situations we face:

Correct AnswerverifiedShow Answer

Commitment devices can be:

Correct AnswerverifiedShow Answer

Suppose studies showed that only 15 percent of all teens wear their bike helmets while riding their bikes.If policymakers wish to have more teens wear their bike helmets,they should:

Correct AnswerverifiedShow Answer

An example of a heuristic is:

Correct AnswerverifiedShow Answer

The concept of loss aversion is:

Correct AnswerverifiedShow Answer

Disclosing information in more usable ways to decision-makers:

Correct AnswerverifiedShow Answer

When we study choice architecture,we recognize that people make:

Correct AnswerverifiedShow Answer

Behavioral economists accept that people _ their well-being but sometimes ______.

Correct Answer
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