Behavioral Economics Quiz

What is Behavioral Economics?

• The study of market trends and financial forecasting

• The subfield of economics that applies psychological insights into human behavior and to explain economic decision making

• The analysis of supply and demand in various markets

• The study of international trade and its effects on local economies

What is Cognitive Bias?

• A conscious decision-making process

• A subconscious error in thinking that leads to irrational decision making

• A method of logical reasoning

• A strategy for improving memory retention

What is Confirmation Bias?

• The tendency to seek out information that contradicts our preconceptions

• The tendency to search for information that supports our preconceptions and to ignore or distort contradictory evidence

• The ability to change one's mind based on new evidence

• The tendency to avoid making decisions

What is the Endowment Effect?

• The tendency to undervalue things you already own

• The tendency to put more value on things you already own

• The tendency to value things you do not own

• The tendency to disregard the value of owned items

What does FOMO (Fear of Missing Out) refer to?

• The fear of losing money in investments

• The tendency to feel anxiety/fear that an exciting or interesting event may currently be happening elsewhere, often aroused by posts seen on a social media website

• The fear of making wrong decisions

• The fear of public speaking

What is Hedonic Adaptation?

• The tendency to remain unhappy regardless of circumstances

• The tendency to return to a baseline level of happiness regardless of whether you go through a positive or negative experience or event

• The tendency to become increasingly happy over time

• The tendency to avoid negative experiences

What is Herd Mentality?

• The tendency to act independently of others

• The tendency to conform to the behaviors and beliefs of the people around you

• The tendency to lead others in decision making

• The tendency to avoid social interactions

What is Loss Aversion?

• The tendency to seek out losses

• The tendency to regard losses as considerably more important than gains of comparable magnitude

• The tendency to ignore losses

• The tendency to value gains more than losses

What is Overconfidence Bias?

• The tendency to be less confident in one's abilities

• The tendency people have to be more confident in their own abilities

• The tendency to accurately assess one's abilities

• The tendency to avoid taking risks

What is Overestimation?

• When a person believes they are worse at something than they actually are

• When a person believes they are better at something than they actually are

• When a person accurately assesses their abilities

• When a person underestimates their abilities