U1 Behavioral Economics

Front

What is the most common method for allocating resources in the United States? Options: Force, First come-First serve, Counting the number of freckles on each person’s nose, Markets

Back

Markets

Front

Productive Cooperation: Requires that people be willing to sacrifice their own well being to make other people better off.

Back

Requires that people be willing to sacrifice their own well being to make other people better off.

Front

Market allocation of goods and services: Can only be achieved when producers and consumers have enough information to make good decisions.

Back

Can only be achieved when producers and consumers have enough information to make good decisions.

Front

The biggest advantage of allocating through markets is that it:

Back

Motivates people to produce more of the goods and services that people want most.

Front

What will determine if the government program to help homeless people actually helps them?

Back

The incentives created by the program.

Front

Which of the following best describes the benefit and cost of allocating a good by first come-first serve?

Back

Benefit—it gives people without the opportunity to make much money working a better chance to compete successfully for the good. Cost—the competition doesn’t result in more of the goods people want being produced.

Front

Behavioral economics…

Back

Combines economics and psychology to study why people behave the way they do in the real world

Front

Which of the following is TRUE about cognitive biases? Options: It is easy to recognize when cognitive biases are influencing our own decisions, There is rarely anything you can do to combat a cognitive bias’ influence, There are only a handful of cognitive biases that exist, Awareness is often the first step to overcoming the influence of a cognitive bias

Back

Awareness is often the first step to overcoming the influence of a cognitive bias

Front

Which cognitive bias might be influencing Andrew’s decision making when he finds many resources that highlight the benefits of a specific car model? Options: Confirmation Bias, Hedonic Adaptation, The Sunk Cost Fallacy, Overconfidence

Back

Confirmation Bias

Front

Mina wants to start using an investment app that all of her friends are raving about. She hasn’t done any research on the app, but she trusts her friends’ judgment. At home, Mina’s mom points out that Mina is being influenced by FOMO and herd mentality. All of the following are things Mina can do to overcome these cognitive biases EXCEPT…

Back

Watch a positive video about the app, download the app, and start using it that day