Review for Behavior Economics Quiz

What is the best example of the Endowment Effect?

• A kid has two boxes of cereal. The first one has his favorite characters on it. The second has a regular cover. The kid prefers to give the cereal with the plain, regular box, even though they have the same taste.

• A person needs to buy a new washing machine to replace a very broken one. The person buys a cheaper machine instead of the more expensive one with a 5-year warranty.

• There is a music festival in town. A girl decides to go because her friend is going, even though she doesn't care about any of the bands playing.

What is the best example of hedonic adaptation?

• The Smith family buys a new car,. They are very happy as time goes on, but they don't care about it as much.

• Becky buys a new iphone because she doesn't want to feel left out.

• Suzie rents a movie and makes it 20 minutes into the movie and realizes she hates it. She forces herself to finish the movie so that she didn't spend that money for nothing.

Tags

CCSS.RI.8.1

CCSS.RI.8.8

CCSS.RL.11-12.1

CCSS.RL.8.1

CCSS.RL.9-10.1

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.

Which is an example of sunk cost?

• Carlly was 100% sure that she got the answer right on the test but when she got it back she found out she got it wrong.

• Adele's friends purchased the latest iphone but she couldn't afford the same and was disappointed.

• Lisa went to the mall and bought a foundation that was two shades too dark but decided to use i anyway.

Which situation is an example of the sunk cost effect?

• All your friends are going to hang out. Your money is tight but you decide to go anyway.

• You go to an amusement park with your friends but you've already been there and you know it's not a great park. You don't want to leave because the tickets are expensive.

Which demonstrates the FOMO effect?

• Winnie got invited to a party but couldn't go bc of homework. She was very sad:(

• Bernard's friend invited him over for a night out. He quickly came up with an excuse not to go.

• Bart was planning a weekend trip to Florida with his girl Hellen. He soon realized that he didn't like her and cancelled the trip immediately.

Which is the best example of FOMO?

• Ethan and Jessie finish a bucket of hummus after they bought it even though they didn't like it.

• Jessie decides to go to the National Hummus Convention. Ethan goes even though he doesn't like hummus because he doesn't want to miss something exciting.

• Ethan and Jessie race to the Hummus Convention to see who can get there faster.

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CCSS.RL.11-12.3

CCSS.RL.6.3

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Which scenario describes Loss Aversion?

• There is a new Minions movie out. Everyone is talking about it but economically you cannot afford to see the movie. You but the movie so you do not feel left out.

• You think you want a nice bed, but you find out that a couch is better so you buy the couch.

• Your buddy wants to invest in a skydiving business but you are worried about hte lawsuits, so you do not invest.

Which scenario best describes sunk cost?

• Buying food and not enjoying but you eat it anyway because you'd feel bad if you threw it out.

• Buying a phone because the price is better.

• Not being able to pay rent because prices rose.

• Buying a ticket to go to a convert and the convert being not interesting.

What would someone with a cognitive bias towards comfort > looks be most likely to buy?

• Steel toe boots

• 80 inch boots

• Queen Elizabeth's lead makeup

• Alpaca wool robe