Behavioral Economics Vocabulary Quiz

What is Behavioral Economics?

• The study of market trends and stock prices

• The subfield of economics that applies psychological insights into human behavior

• The analysis of government policies on trade

• The examination of historical economic data

What does Cognitive Bias refer to?

• A conscious decision-making process

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

• A method of improving memory retention

• A strategy for effective communication

What is Confirmation Bias?

• The tendency to seek information that contradicts our beliefs

• The tendency to search for information that supports our preconceptions

• The ability to remember past events accurately

• The skill of effective negotiation

What is the Endowment Effect?

• The tendency to undervalue things you own

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

• The ability to predict future market trends

• The skill of effective bargaining

What does FOMO stand for?

• Fear of Making Offers

• Fear of Missing Out

• Fear of Monetary Obligations

• Fear of Market Opportunities

What is Hedonic Adaptation?

• The tendency to remain unhappy after positive experiences

• The tendency to return to a baseline level of happiness after experiences

• The ability to adapt to new environments quickly

• The skill of maintaining consistent productivity

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 ability to lead groups effectively

• The skill of critical thinking

What is Loss Aversion?

• The tendency to regard gains as more important than losses

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

• The ability to recover quickly from financial setbacks

• The skill of effective budgeting

What is Overconfidence Bias?

• The tendency to underestimate one's abilities

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

• The ability to accurately assess one's skills

• The skill of effective communication

What does Overestimation refer to?

• 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

• The ability to accurately predict outcomes

• The skill of effective time management