Psychological Concepts Quiz

What is the Sunk Cost Fallacy?

• The tendency to make decisions based on future potential

• The tendency to make decisions based on past investments

• The tendency to avoid making decisions altogether

• The tendency to make decisions based on peer pressure

What are Sunk Costs?

• Costs that can be recovered

• Costs that have not yet been incurred

• Costs that have already been incurred and cannot be recovered

• Costs that are planned for the future

What is the Overnight Test?

• A strategy to combat loss aversion by imagining an item replaced with cash

• A test to determine sleep quality

• A method to evaluate overnight stock market changes

• A strategy to improve memory retention

What does Overestimation mean?

• Believing one is worse at something than they are

• Believing one is better at something than they are

• Accurately assessing one's abilities

• Ignoring one's abilities

What is Overconfidence Bias?

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

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

• The tendency to avoid making decisions

• The tendency to rely on others' opinions

What is Loss Aversion?

• The tendency to regard gains as more important than losses

• The tendency to regard losses as more important than gains

• The tendency to ignore losses

• The tendency to focus only on potential gains

What is Herd Mentality?

• The tendency to act independently

• The tendency to conform to the behaviors and beliefs of others

• The tendency to lead others

• The tendency to avoid social interactions

What does Confirmation Bias refer to?

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

• The tendency to search for information that supports our preconceptions

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

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

What is Behavioral Economics?

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

• The tendency to search for information that supports our preconceptions

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

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

What type of bias is a subconscious error in thinking?

• Endowment Effect

• Confirmation Bias

• Cognitive Bias

• Behavioral Economics