UNIT ONE: FINAL TEST SEM ONE 2024

You see an advertisement promoting a sale “for a limited time only!” with a countdown clock. Which bias is being used?

• Fear of Missing Out (FOMO)
• Herd Mentality
• Loss Aversion
• Hedonic Adaptation
• none of the above

Ally signs up for a Netflix trial. Because she “owns” a full account, she places high value on it and signs up. This is:

• The Endowment Effect
• Loss Aversion
• Herd Mentality
• Overprecision
• None of the Above

People who win the lottery tend to return to their original levels of happiness after the novelty of winning wears off.

• This is an example of Hedonic Adaptation
• This is an example of the Endowment Effect
• This is an example of Confirmation Bias
• This is an example of Herd Mentality
• None of the Above

You are new to a city and find two restaurants near each other that offer a similar menu. You pick the more crowded one.

• This is an example of Herd Mentality
• This is an example of Fear of Missing Out (FOMO)
• This is an example of Sunk Cost Fallacy
• This is an example of Overvaluing
• None of the Above

In 2021, many people saw the value of GameStop stock increasing sharply and purchased the stock too. These buyers were:

• Experiencing Herd Mentality
• Experiencing Overprecision
• Experiencing Confirmation Bias
• Experiencing Hedonic Adaptation
• All of the Above

Inner values have to do with:

• Our personal and social identities.
• Our desire for belonging and relatedness with our family members, neighbors, friends, and groups.
• How much we value the tangible aspects of life, the external world, our physical health and well-being.
• What we think/believe about money.
• None of the Above

What is the Affect Heuristic?

• A mental shortcut where decisions are influenced by emotions and feelings rather than objective facts.
• A decision-making process where choices are based on logical analysis and detailed evaluation.
• A strategy where decisions are made after consulting multiple experts and gathering diverse opinions.
• A method of decision-making that relies solely on past experiences and memories.
• None of the Above

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

• José wants to go see a movie that all of his friends have seen and are raving about
• 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
• None of the Above

Which concept suggests that people prioritize their needs in a specific order, starting with the most basic physiological needs before moving to higher-level needs such as safety, love and belonging, esteem, and self-actualization?

• Hierarchy of Needs
• The Law of Diminishing Returns
• The Endowment Effect
• Loss Aversion
• Affect Heuristic

What concept refers to the idea that individuals have different attitudes, behaviors, and emotional responses toward money, which influence their financial decisions and habits?

• Money Personality
• Behavioral Finance
• Risk Tolerance
• Sunk Cost Fallacy
• Present Bias