Unit 1.0 Behavioral Economics Vocabulary

Multiple Choice

Which of the following best describes the field of behavioral economics?

• It studies only financial markets and investments.

• It applies psychological insights to explain economic decision making.

• It focuses solely on government policies.

• It is concerned only with mathematical models of the economy.

Explanation Slide...

Confirmation bias is the tendency to favor information that confirms our existing beliefs, leading us to overlook or dismiss contradictory evidence. This makes the first answer choice the correct one.

Multiple Choice

What is the definition of cognitive bias?

• The tendency to rely too heavily on the first piece of information encountered
• The tendency to favor information that confirms one's preexisting beliefs or values
• The tendency to give greater weight to the first information received
• The tendency to overestimate the likelihood of events based on memorable occurrences

Multiple Choice

What is Confirmation Bias?

• Favoring information that confirms existing beliefs

• Choosing familiar options due to uncertainty

• Agreeing with a group to avoid conflict

• Ignoring all types of evidence

Multiple Choice

Which of the following best describes overconfidence bias?

• The tendency to be more confident in one's own abilities than is justified

• The tendency to avoid losses at all costs

• The tendency to make decisions based on past investments

• The tendency to follow the crowd

Multiple Choice

What is Social Media Marketing?

• The use of newspapers magazines or commercials to promote your business.

• The use of signs and posters to promote your service or product

• The use of social media platforms and websites to promote a product or service.

• The use of Snapchat or Facetime

Multiple Select

Which of the following are key components of social media marketing?

• Using social media platforms to promote a product or service

• Focusing only on traditional advertising methods

• Building brand visibility and connectivity

• Ignoring customer engagement

Fill in the Blank

Fill in the blank: Sunk costs are costs that have already been incurred and cannot be ___.

Multiple Select

Which of the following are reasons why people fall for the sunk cost fallacy, according to the image?

• Belief that quitting is for losers

• Past successes delude future investments

• Emotional connection over a rational one

• Desire to maximize short-term profits

Multiple Choice

What is the main focus of behavioral economics?

• Applying psychological insights to economic decision making

• Studying only financial markets

• Focusing on mathematical models

• Ignoring human behavior

Multiple Choice

What is the term used to describe the influence of a group on an individual's behavior?

• Herd mentality

• Pack behavior

• Groupthink

• Mob mentality

Multiple Choice

Which is an example of Herd Mentality?

• All the cool kids at school are buying Booga mics, so you decide to buy one to be cool too.

• Everyone is going to see the Emoji movie, but you decide not to go because it is clearly a bad movie..

• Mr. High says Hawaiian pizza is good but Mr.Dwyer heroically stands against the hierarchy.

Multiple Choice

The tendency to search for information that confirms our existing beliefs is called:

• Overconfidence bias

• Herd mentality

• Confirmation bias

• Loss aversion

Multiple Choice

Which term describes the fear of missing out on potential opportunities or experiences?

• Endowment effect

• Overestimation

• Hedonic adaptation

• FOMO

Multiple Choice

The tendency to value things more highly simply because we own them is known as:

• Loss aversion

• Endowment effect

• Herd mentality

• Overconfidence bias

Multiple Choice

Which bias leads people to feel more pain from losses than pleasure from equivalent gains?

• Confirmation bias

• Overestimation

• Endowment effect

• Loss aversion