Behavioral Economics Quiz

What is the main focus of behavioral economics?

• Psychological factors

• Physical factors

• Environmental factors

• Economic factors

What is the ultimatum game used for in behavioral economics?

• To study risk aversion

• To study loss aversion

• To study perception bias

• To study decision-making

What is the Framing Effect in behavioral economics?

• The influence of cognitive bias on decision making

• The influence of perception on decision making

• The influence of loss aversion on decision making

• The influence of risk aversion on decision making

What is the main idea behind psychological pricing?

• To make people avoid purchasing

• To make people spend more money

• To make people feel dissatisfied

• To make people feel like they're getting a good deal

What is the main concept behind nudge theory in behavioral economics?

• To manipulate people's decisions

• To limit people's options

• To encourage people to act a certain way without changing choices

• To change the choices available to people

What is loss aversion in behavioral economics?

• The strong desire to avoid making decisions

• The strong desire to take risks

• The strong desire to avoid losing

• The strong desire to avoid gaining

How did the grocery stores in Washington DC use loss aversion to reduce plastic bag usage?

• By imposing a 5-cent tax on disposable bags

• By imposing a 5-cent tax on reusable bags

• By offering a 5-cent bonus for using reusable bags

• By offering a 5-cent discount for using disposable bags

What did the study on incentivizing employees based on loss aversion reveal?

• Employees performed better with a guaranteed bonus

• Employees performed better without any bonus

• Employees performed better with an upfront bonus

• Employees performed better with a promised end-of-year bonus

What does the ultimatum game reveal about human behavior?

• People always make rational decisions

• People are influenced by fairness and justice

• People are always loss-averse

• People are always risk-averse

What is the main goal of behavioral economics?

• To eliminate rational decision-making

• To prove classical economic theories wrong

• To understand how people actually behave

• To ignore psychological factors in decision-making