Worksheets4.1.2.3 Behavioural Economics & Biases VIDEO
Total questions: 1
Worksheet time: 18mins
1-15.
Answer the questions below after watching the video
What does behavioral economics suggest about consumer decision-making?
Consumers always make rational decisions.
Decisions are only influenced by economic factors.
Emotional and psychological factors can influence decisions.
Consumers are not affected by social norms.
What is an example of price anchoring in retail?
Cost-plus pricing strategy.
Pricing based on competitor's prices.
Comparison of prices to a recommended retail price.
Discount offers on new products.
How does social norm influence tipping behavior?
Social norms dictate tipping in restaurants but not at private parties.
Tipping is consistent across all dining experiences.
Tipping is based solely on the quality of food.
People tip more at high-end restaurants.
What does the availability bias explain in decision-making?
Decisions are based on the most available information.
People assess risks based on how easily examples come to mind.
All decisions are made after thorough risk assessment.
Availability of information has no impact on decisions.
How might societal norms influence personal behavior?
They have no influence on personal decisions.
They dictate behaviors like tipping in specific social settings.
They encourage consistent behavior in all contexts.
Societal norms are only relevant in professional settings.
What does the availability bias potentially cause people to overestimate?
The effectiveness of their decisions.
Their ability to influence outcomes.
The frequency of common events.
The likelihood of rare events based on memorable occurrences.
How does framing influence consumer behavior?
It has no significant impact on decisions.
Only price framing affects consumer decisions.
Consumers are less likely to buy products labeled as 'low fat'.
The presentation of information can alter decision-making.
What is loss aversion in behavioral economics?
Preference for avoiding losses over acquiring equivalent gains.
Losses are irrelevant in economic decision-making.
Ignoring potential losses when making decisions.
Focusing only on potential gains in investments.
What behavior is described by the endowment effect?
Valuing potential gains more than what one already owns.
Undervaluing one's possessions compared to others' items.
Overvaluing one's own possessions when considering a trade.
Trading items frequently to maximize gains.
In what way does framing affect perceptions of product healthiness?
Products labeled as 'low fat' are seen as less healthy.
Framing has an effect only when products are unfamiliar.
No impact on perception, only on price.
Positive framing like 'low fat' can make products seem healthier.
What is an example of herd behavior in financial markets?
Following others' decisions leading to potential market bubbles.
Individual analysis before investing.
Investing based on personal research only.
Avoiding popular stocks to prevent losses.
How does choice architecture influence decisions in a restaurant?
Food presentation does not influence consumption.
Customers always choose the cheapest item.
Menu design has no impact on customer choices.
Location of salad bars can encourage healthier choices.
Why might a firm employ someone even if there is no immediate need for their labor?
To reduce operational costs.
To maintain a high unemployment rate.
Because they are overstaffed.
Out of social responsibility or to improve living standards.
What role does altruism play in behavioral economics?
It explains actions where no personal gains are expected in return.
It is only relevant in non-economic contexts.
It is ignored as it does not affect economic decisions.
Altruism is less important than profit maximization.
Why might behavioral economics consider non-economic factors in decision-making?
Only traditional economics considers these factors.
It does not consider such factors relevant.
To account for emotional and social influences on decisions.
Because it focuses solely on financial outcomes.
