WorksheetsUNIT ONE: FINAL TEST SEM ONE 2024
Total questions: 47
Worksheet time: 24mins
Name
Class
Date
1.
You see an advertisement promoting a sale “for a limited time only!” with a countdown clock. Which bias is being used?
a)
Fear of Missing Out (FOMO)
b)
Herd Mentality
c)
Loss Aversion
d)
Hedonic Adaptation
e)
none of the above
2.
Ally signs up for a Netflix trial. Because she “owns” a full account, she places high value on it and signs up. This is:
a)
The Endowment Effect
b)
Loss Aversion
c)
Herd Mentality
d)
Overprecision
e)
None of the Above
3.
People who win the lottery tend to return to their original levels of happiness after the novelty of winning wears off.
a)
This is an example of Hedonic Adaptation
b)
This is an example of the Endowment Effect
c)
This is an example of Confirmation Bias
d)
This is an example of Herd Mentality
e)
None of the Above
4.
You are new to a city and find two restaurants near each other that offer a similar menu. You pick the more crowded one.
a)
This is an example of Herd Mentality
b)
This is an example of Fear of Missing Out (FOMO)
c)
This is an example of Sunk Cost Fallacy
d)
This is an example of Overvaluing
e)
None of the Above
5.
In 2021, many people saw the value of GameStop stock increasing sharply and purchased the stock too. These buyers were:
a)
Experiencing Herd Mentality
b)
Experiencing Overprecision
c)
Experiencing Confirmation Bias
d)
Experiencing Hedonic Adaptation
e)
All of the Above
6.
Inner values have to do with:
a)
Our personal and social identities.
b)
Our desire for belonging and relatedness with our family members, neighbors, friends, and groups.
c)
How much we value the tangible aspects of life, the external world, our physical health and well-being.
d)
What we think/believe about money.
e)
None of the Above
7.
What is the Affect Heuristic?
a)
A mental shortcut where decisions are influenced by emotions and feelings rather than objective facts.
b)
A decision-making process where choices are based on logical analysis and detailed evaluation.
c)
A strategy where decisions are made after consulting multiple experts and gathering diverse opinions.
d)
A method of decision-making that relies solely on past experiences and memories.
e)
None of the Above
8.
Which of the following scenarios BEST demonstrates FOMO (Fear of Missing Out)?
a)
José wants to go see a movie that all of his friends have seen and are raving about
b)
Megan takes a baking class after seeing a sign for the class at her favorite bakery
c)
David goes on a vacation to Europe and posts about it on social media every day
d)
Angela sees an advertisement for a pair of shoes and decides to buy them
e)
None of the Above
9.
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?
a)
Hierarchy of Needs
b)
The Law of Diminishing Returns
c)
The Endowment Effect
d)
Loss Aversion
e)
Affect Heuristic
10.
What concept refers to the idea that individuals have different attitudes, behaviors, and emotional responses toward money, which influence their financial decisions and habits?
a)
Money Personality
b)
Behavioral Finance
c)
Risk Tolerance
d)
Sunk Cost Fallacy
e)
Present Bias
11.
TRUE OR FALSE? According to a study by the National Academy of Sciences, higher incomes mean increased daily happiness and overall life satisfaction.
a)
True
b)
False
12.
Our financial values influence our beliefs about:
a)
Appropriateness of financial decisions (is this the right choice for me?)
b)
How satisfied and fulfilled by beauty and material possessions we are
c)
Our desires to be alone or with others.
d)
Freedom and independence
e)
None of the Above
13.
Our physical values influence:
a)
Our desire for pleasure and comfort.
b)
Our sense of purpose and meaning in life.
c)
Our feelings of relatedness to groups.
d)
Our beliefs about money and how long it will last.
e)
None of the Above
14.
Which value may lead to making purchases (clothing, etc.) in order to fit in with social groups?
a)
Social Values
b)
Inner Values
c)
Physical Value
d)
Financial Values
e)
None of the Above
15.
How did Ronald Reed, known as the "8 million dollar janitor," make his fortune?
a)
He invested wisely in stocks and lived frugally.
b)
He inherited a small sum of money and invested it in farm equipment.
c)
He inherited a large sum of money from a relative.
d)
He started a successful janitorial business.
e)
He invested in Bitcoin in the 1950's.
16.
Which "money personality" leads to a belief that money is complicated and that you are underserving of it?
a)
Avoidance
b)
Status
c)
Worship
d)
Vigilance
e)
None of the above
17.
Which "money personality" leads to a belief that the potential losses of a risk will always outweigh the potential gains?
a)
Vigilance
b)
Avoidance
c)
Status
d)
Worship
e)
None of the above
18.
Which "money personality" leads to a belief that your self-worth and happiness are directly tied to the kind of lifestyle that you lead?
a)
Status
b)
Avoidance
c)
Worship
d)
Vigilance
e)
None of the above
19.
Which "money personality" leads to a belief that money is important and scarce and that you can never have enough of it?
a)
Worship
b)
Avoidance
c)
Status
d)
Vigilance
e)
None of the above
20.
What financial phenomenon did Ronald Reed take advantage of to build his wealth?
a)
Compound interest
b)
High-interest savings accounts
c)
Day trading stocks
d)
Winning the lottery
e)
None of the Above
21.
Which of the following best describes what a cognitive bias is?
a)
An error in the way we think that can influence our decisions
b)
A rational decision that is based on research and facts
c)
The belief that a person should change their opinions when new facts arise
d)
The belief that we are right until someone provides information that contradicts our belief
e)
None of the Above
22.
Which of the following actions is the BEST way to counteract loss aversion when making a decision?
a)
Reframing the decision to focus on the potential gains instead of the potential losses
b)
Dwelling on the potential loss you may experience for several days
c)
Making the choice that takes on the most risk possible
d)
Polling a bunch of your friends and family to see what they would decide
e)
None of the Above
23.
Which brain system in behavioral economics is characterized as being slow, deliberate, and logical, typically used for complex decision-making and problem-solving?
a)
System 2
b)
System 1
c)
Automatic System
d)
Heuristic System
e)
Reactive System
24.
Which brain system in behavioral economics is known for being quick, automatic, and emotional, often relying on intuition and immediate reactions?
a)
System 1
b)
Deliberate System
c)
Reflective System
d)
System 2
e)
Logical System
25.
Which brain system is known as the "default" network or the system that we most rely on when making decisions?
a)
System 1
b)
Deliberate System
c)
Reflective System
d)
System 2
e)
Logical System
26.
What term describes the phenomenon where a person who suddenly acquires a large amount of money, such as winning the lottery, may experience changes in behavior, spending habits, and decision-making that can lead to financial instability?
a)
Sudden Wealth Effect
b)
Windfall Syndrome
c)
Loss Aversion
d)
Overconfidence Bias
e)
Money Illusion
27.
Sebastian began day trading stocks at the beginning of the summer. After a month, he made a profit of $200. Due to his short term success and his belief that he is a highly skilled trader, Sebastian puts his entire savings into the market. This is an example of…
a)
Overconfidence Bias
b)
The Fear of Missing Out (FOMO)
c)
Confirmation Bias
d)
The Endowment Effect
e)
All of the Above
28.
Imagine two scenarios: Scenario 1: You see a rare sports card being sold for $500 in a store but choose not to buy it because you think it’s too expensive. Scenario 2: You find a rare sports card worth $500 in your parents’ attic. Rather than sell it, you choose to put it in a case and display it in your room. In scenario 1, you are putting more value on your $500 than the card. In scenario 2, you are putting more value on your card than the $500. This is an example of what?
a)
Endowment effect
b)
The Fear of Missing Out (FOMO)
c)
Overconfidence
d)
Confirmation bias
e)
None of the Above
29.
Michael observed he felt the pain of losing a $20 bill more than he felt the joy of finding it on the sidewalk the week before. This is a result of...
a)
Loss aversion
b)
Endowment effect
c)
Sunk cost
d)
Overconfidence
e)
None of the Above
30.
Unlike traditional economics, behavioral economics believes that…
a)
People do not always behave in a rational way when making economic decisions
b)
People behave in a rational way when making economic decisions
c)
There is no way to predict how people will make economic decisions
d)
People will always update their viewpoints based on new information
e)
None of the Above
31.
Investments of time, effort, and money that cannot be recovered are...
a)
Sunk costs
b)
Opportunity costs
c)
Relevant costs
d)
Avoidable costs
e)
None of the Above
32.
Overconfidence bias may lead the majority of Americans to think that they are…
a)
Above average drivers
b)
Average drivers
c)
Below average drivers
d)
Extremely poor drivers
e)
None of the Above
33.
Due to hedonic adaptation, what do you expect would happen to Anu's level of happiness after buying a new jacket?
a)
It would initially increase, then return to a baseline level
b)
It would remain at a baseline level, then increase over time
c)
It would initially decrease, then return to a baseline level
d)
It would remain at a baseline level, then decrease over time
e)
None of the Above
34.
Your friend gives you an item. A day later, they offer to trade you another item of similar value. According to the endowment effect, most people would keep the item…
a)
They received first
b)
They were offered second
c)
They could sell for the most
d)
They think looks the best
e)
None of the Above
35.
People are compelled to buy MORE stuff for all of the following reasons EXCEPT...
a)
Scientific research proves that the more items we own, the happier we tend to be
b)
The media portrays that the more stuff we have, the happier we will be
c)
We tend to want more compared to those around us
d)
Once the initial novelty of a recent purchase wears off, we look to buy the next new thing
e)
None of the Above
36.
Each of the following statements is an example of confirmation bias EXCEPT...
a)
Seeking information that challenges your beliefs
b)
Interpreting information to support your existing beliefs
c)
Only remembering details that uphold your beliefs
d)
Ignoring information that challenges your beliefs
e)
None of the Above
37.
All of the following explain why humans might "follow the herd" EXCEPT...
a)
People prefer having opinions that are very different from those of others
b)
It can be uncomfortable standing out from the crowd
c)
Humans evolved to stick with the herd to survive
d)
Fighting social pressure can be difficult to do
e)
Option 5
38.
What is the "Cashless Effect"?
a)
The tendency for people to spend more money when they use digital or card payments instead of cash.
b)
The phenomenon where people spend less money when they use cash instead of credit or debit cards.
c)
The trend of eliminating cash payments in favor of digital transactions, such as mobile payments and credit cards.
d)
A policy by businesses to only accept cash payments to avoid transaction fees.
e)
None of the Above
39.
Loss Aversion refers to:
a)
The tendency to avoid losses more than acquiring gains
b)
The fear of missing out on potential gains
c)
Giving more weight to recent information than older information
d)
Placing too much importance on the first piece of information received
e)
None of the Above
40.
The Endowment Effect is best described as:
a)
Valuing things more highly because we own them
b)
The tendency to conform to the behavior of the majority
c)
Overestimating the importance of one's own decisions
d)
Placing too much emphasis on the most recent events
e)
None of the Above
41.
Sunk Cost Fallacy refers to:
a)
Making decisions based on past investments of time, money, or effort
b)
The tendency to place too much importance on the first piece of information received
c)
Valuing items more because we own them
d)
Giving more weight to recent information than older information
e)
None of the Above
42.
Herd Mentality is defined as:
a)
The tendency to conform to the behavior of the majority
b)
Overestimating the importance of one's own decisions
c)
Tendency to seek information that confirms pre-existing beliefs
d)
Making decisions based on the most recent events
e)
None of the Above
43.
FOMO (Fear of Missing Out) involves:
a)
The anxiety that can occur when someone perceived they are missing potential gains.
b)
Valuing things more highly because we own them
c)
Placing too much emphasis on the most recent events
d)
Making decisions based on past investments of time, money, or effort
e)
None of the Above
44.
Overconfidence Bias refers to:
a)
Having more confidence in one's decisions than is objectively justified
b)
Tendency to seek information that confirms pre-existing beliefs
c)
Giving more weight to recent information than older information
d)
Placing too much importance on the first piece of information received
e)
None of the Above
45.
Hedonic Adaptation is best described as:
a)
The tendency to return to a baseline level of happiness despite positive or negative events
b)
Tendency to conform to the behavior of the majority
c)
Valuing things more highly because we own them
d)
Overestimating the importance of one's own decisions
e)
None of the Above
46.
Anchoring Bias refers to:
a)
Relying heavily on the first piece of information encountered when making decisions
b)
Giving more weight to recent information than older information
c)
Making decisions based on past investments of time, money, or effort
d)
Placing too much emphasis on the most recent events
e)
None of the Above
47.
Recency Bias involves:
a)
Making decisions based on the most recent events
b)
Overestimating the importance of one's own decisions
c)
Tendency to conform to the behavior of the majority
d)
The fear of missing out on potential gains
e)
None of the Above
100 %
