Which of the following scenarios BEST demonstrates FOMO (Fear of Missing Out)?
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
José wants to go see a movie that all of his friends have seen and are raving about
José wants to go see a movie that all of his friends have seen and are raving about
100
How has social media marketing evolved over the past few decades?
Modern marketing urges you to make financial decisions that align with your goals
Modern marketing utilizes extremely detailed user data to create personalized ads for each user
Modern marketing makes it easy to distinguish advertising from other types of content
Modern marketing creates a less seamless shopping experience for consumers
Modern marketing utilizes extremely detailed user data to create personalized ads for each user
100
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
Overconfidence Bias
The Fear of Missing Out (FOMO)
Confirmation Bias
The Endowment Effect
Overconfidence Bias
100
Investments of time, effort, and money that cannot be recovered are...
Opportunity costs
Sunk costs
Relevant costs
Avoidable costs
Sunk costs
100
Each of the following statements is an example of confirmation bias EXCEPT...
Interpreting information to support your existing beliefs
Seeking information that challenges your beliefs
Only remembering details that uphold your beliefs
Ignoring information that challenges your beliefs
Seeking information that challenges your beliefs
200
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...
Endowment effect
Loss aversion
Sunk cost
Overconfidence
Loss aversion
200
Research done on peoples' salaries and happiness levels has shown that...
Most people are satisfied with their current annual salaries
Increasing your annual salary is guaranteed to increase your long-term happiness
Humans typically become accustomed to how much they earn and eventually want more
Most people need to earn at least $200,000 a year in order to be happy
Humans typically become accustomed to how much they earn and eventually want more
200
Which of the following best describes what a cognitive bias is?
A rational decision that is based on research and facts
The belief that a person should change their opinions when new facts arise
the belief that we are right until someone provides information that contradicts our belief
An error in the way we think that can influence our decisions
An error in the way we think that can influence our decisions
200
Unlike traditional economics, behavioral economics believes that
People behave in a rational way when making economic decisions
People do not always behave in a rational way when making economic decisions
There is no way to predict how people will make economic decisions
People will always update their viewpoints based on new information
People do not always behave in a rational way when making economic decisions
200
Janet has a snowboard she doesn’t use anymore, but loss aversion has made her question whether or not she should sell it. Her friend Jack suggests she use the Overnight Test. Which of the following scenarios demonstrates the strategy she’s using?
Imagine the snowboard was replaced with cash, then make a plan about how to spend the cash.
Imagine the snowboard was replaced with cash, then figure out how to keep the cash and get her snowboard back.
Imagine the snowboard was replaced with cash, then decide if she's happier with the cash or the snowboard.
Imagine the snowboard was replaced with cash, then figure out how to use the cash to get her snowboard back.
Imagine the snowboard was replaced with cash, then decide if she's happier with the cash or the snowboard.
300
All of the following are types of overconfidence bias EXCEPT...
Overplacement
Overestimation
Overprecision
Overgeneralization
Overgeneralization
300
A website tells you, "Only one left!" while shopping online. Which loss aversion strategy is this website using?
Coupons
Scarcity and urgency
Buy now, get free shipping
Free trials and samples
Scarcity and urgency
300
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?
Fear of missing out
Overconfidence
Endowment effect
Confirmation bias
Endowment effect
300
You spend an entire Saturday going to car dealerships in search of a used car. You spend hours looking at cars and even test drive a few, but there are none you like that fit your budget. What is the sunk cost you should ignore when deciding whether or not to buy a car that day?
The cost of the car
The cost of the warranty
The time it will take to drive home
The time you spent looking for cars that day
The time you spent looking for cars that day
300
An "experiential purchase" is...
Something that commemorates an experience, like a souvenir
Something that creates or enhances an experience or connects us with other people
Something that was made by hand rather than at a factory
Something that has a lot of monetary value
Something that creates or enhances an experience or connects us with other people
400
You are doing research on a new electric car that you are interested in buying. You only visit the car company’s website and an online message board of electric car enthusiasts to do your research. This strategy may lead to …
Herd Mentality
The Endowment Effect
Confirmation Bias
Loss Aversion
Confirmation Bias
400
Imani attends a town hall meeting where a tax increase is proposed to help pay for a new bridge. After the meeting, she reads Facebook comments that complain about the already high taxes in her town, which is a view that she agrees with. To avoid confirmation bias, Imani should…
avoid social media since it will influence her decision
seek out comments that support the tax increase and the bridge project to provide an alternative viewpoint
allow others to make the decision because she is too biased
join a Facebook group that organizes citizens that are opposed to the tax increase
seek out comments that support the tax increase and the bridge project to provide an alternative viewpoint
400
Herd mentality may explain why...
Davona chose to skip dinner with her friends and watched a movie at home instead
Mason went to see a movie with his friends even though he didn't like the genre
Ginnifer decided to keep her current phone even though her closest friends bought the new version
Akshay bought a shirt he liked from an unpopular brand
Mason went to see a movie with his friends even though he didn't like the genre
400
You buy a stock that has a price of $50 per share. A week later the stock's price drops to $25 per share (it's lost half its value). If you are affected by loss aversion you would be likely to…
Buy more shares
Sell the shares
Do nothing
Look for other stocks to buy
Sell the shares
400
People are compelled to buy MORE stuff for all of the following reasons EXCEPT...
The media portrays that the more stuff we have, the happier we will be
We tend to want more compared to those around us
Scientific research proves that the more items we own, the happier we tend to be
Once the initial novelty of a recent purchase wears off, we look to buy the next new thing
Scientific research proves that the more items we own, the happier we tend to be
500
Due to hedonic adaptation, what do you expect would happen to Anu's level of happiness after buying a new jacket?
It would initially increase, then return to a baseline level
It would remain at a baseline level, then increase over time
It would initially decrease, then return to a baseline level
It would remain at a baseline level, then decrease over time
It would initially increase, then return to a baseline level
500
When using social media, it's important to remember that...
Social media ads are trying to get you to buy stuff you NEED, not want
Marketers have your best interests in mind and want you to be financially responsible
People typically only post about the best parts of their lives on social media
The more likes a post has, the more trustworthy and accurate the information is likely to be
People typically only post about the best parts of their lives on social media
500
People who experience FOMO may...
save a percentage of their paycheck each month
donate money to a cause they care about
go into debt to keep up with everyone else
create and stick to a monthly budget
go into debt to keep up with everyone else
500
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…
They received first
They were offered second
They could sell for the most
They think looks the best
They received first
500
All of the following explain why humans might "follow the herd" EXCEPT...
People prefer having opinions that are very different from those of others
It can be uncomfortable standing out from the crowd
Humans evolved to stick with the herd to survive
Fighting social pressure can be difficult to do
People prefer having opinions that are very different from those of others