U2D3

Imagine two scenarios: 

Scenario 1: You see a rare sports card being sold for $500 in a store but choose not to buy it because you think it’s too expensive. 

Scenario 2: You find a rare sports card worth $500 in your parents’ attic. Rather than sell it, you choose to put it in a case and display it in your room. 

In scenario 1, you are putting more value on your $500 than the card. In scenario 2, you are putting more value on your card than the $500. This is an example of what?

• The Fear of Missing Out (FOMO)

• Overconfidence

• Endowment effect

• Confirmation bias

Michael observed he felt the pain of losing a $20 bill more than he felt the joy of finding it on the sidewalk the week before. This is a result of...

• Endowment effect

• Loss aversion

• Sunk cost

• Overconfidence

Which of the following is the LEAST likely to influence a person’s financial decisions?

• What their values are

• What their family’s needs are

• What their budget is

• What their friends want

Unlike traditional economics, behavioral economics believes that…

• People behave in a rational way when making economic decisions

• People do not always behave in a rational way when making economic decisions

• There is no way to predict how people will make economic decisions

• People will always update their viewpoints based on new information

Investments of time, effort, and money that cannot be recovered are...

• Opportunity costs

• Sunk costs

• Relevant costs

• Avoidable costs

A website tells you, "Only one left!" while shopping online. Which loss aversion strategy is this website using?

• Coupons

• Scarcity and urgency

• Buy now, get free shipping

• Free trials and samples

Tags

CCSS.RI. 9-10.8

CCSS.RI.11-12.5

CCSS.RI.8.5

CCSS.RI.8.8

CCSS.RI.9-10.5

Which of the following scenarios BEST demonstrates FOMO (Fear of Missing Out)?

• Megan takes a baking class after seeing a sign for the class at her favorite bakery

• David goes on a vacation to Europe and posts about it on social media every day

• Angela sees an advertisement for a pair of shoes and decides to buy them

• José wants to go see a movie that all of his friends have seen and are raving about

Tags

CCSS.RL.5.6