H2W2

Open Ended

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Open Ended

This video is a good example of a "ripple effect". What do you think that means?

Multiple Choice

According to rational economic theory, people make decisions by:

• Following precise mathematical rules that ensure the optimal outcome

• Following their instinct

• Weighing all possible options and then letting feelings decide

• Randomly and without careful consideration of the odds at stake

Multiple Choice

The difficulty in considering the real value of a product once its price its known, is an example of:

• Conjunction fallacy

• Anchoring effect

• Loss aversion

• None of the above

Multiple Choice

What is a heuristic?

• An intuitive way to solve problems based on careful analysis

• An intuitive way to solve problems based on previous experience

• A rational problem-solving approach

• An irrational decision

Multiple Choice

According to loss aversion, people’s choices are biased on the fact that:

• Losing is always perceived as better than winning

• Winning is always perceived as worse than losing

• Winning $10 has a stronger positive psychological impact than losing $10

• Losing $10 has a stronger negative psychological impact than winning 10

Multiple Choice

Do heuristics always lead to a wrong choice?

• Yes, as they are based on intuition

• Yes, as they are based on irrational decisions

• No. Heuristics carry an adaptive value as they allow quick decisions even with limited information

• No, as they always lead to the best possible choice