1.Consider the following quote describing human nature:

"The desire to be right and the desire to have been right are two desires, and the sooner we separate them the better off we are. The desire to be right is the thirst for truth. On all counts, both practical and theoretical, there is nothing but good to be said for it. The desire to have been right, on the other hand, is the pride that goeth before a fall. It stands in the way of our seeing we were wrong, and thus blocks the progress of our knowledge."

Which of the following is this quote likely relevant to?

b. Rationality

c.. Overconfidence bias

d.Availability bias

e. Framing bias

2. Which of the following is FALSE regarding Behavioral Economics?

a.It is opposed by many economists

b. It does not believe in people being a "Homo Economicus"

c. It cannot explain all human behavior

d. It is more theoretical than traditional economics

e.Some of its main supporters (researchers) have won Nobel Prizes in Economics

3. What is the definition of behavioral economics?

a. The study of decision making of how to allocate scarce resources at the national level

b. The study of how any form of human behavior is due to being rational

c. The branch of economics that includes anthropology in economic models

d. A part of microeconomics focused on the analysis of supply and demand to determine the price for a good or service

e. The branch of economics that incorporates psychology into economic models

4. Suppose I did a poll of my students in my Economics courses. I asked each student to rate himself/herself relative to the other students in the class. I then found 90% of students rated themselves above average. What type of bias is relevant here?

a. Planning fallacy

b. Overconfidence bias

c. Confirmation bias

d. Social proof bias

e. Framing bias

5. Suppose that you consider two ways that banks lose money: from bank robberies and from employees. When asked which is more likely to explain lost money in banks, most would say bank robberies. They can readily recall bank robberies on TV shows, the news or in movies. But in fact most bank theft is instead from employees.

What type of bias might be relevant here?

a. Planning fallacy

b. Overconfidence bias

c. Confirmation bias

d. Availability bias

e. Framing bias

6.Your instructor drove his family to a party with friends. However, along the way his wife criticized him for getting there late. The reason why? He always underestimates how long it takes to get ready.

What type of bias in Behavioral Economics does your instructor suffer from?

a. The "marriage is worthwhile" fallacy

b. Overconfidence bias

c. Availability bias

d. Framing bias

e. Planning fallacy

7. How are people harmed by the availability bias?

a. They underestimate how boring Economics courses are

b. They make mistakes by not thinking but only following what other people are doing

c. They form incorrect opinions that are not based on data

d. They make bad purchasing decisions because they are swayed by how information is presented to them rather than what the information is

e. They are usually late because they underestimate the difficulty of and time needed for various tasks and projects

8. Suppose you're talking to a friend and she recommends to you a YouTube video. You are reluctant to watch it until you see that there have already been 1,000,000 views and as a result you conclude it must be worth watching.

What cognitive bias might be relevant here?

a. Social proof bias

b. Overconfidence bias

c. Confirmation bias

d.Framing bias

e. Availability bias

9. Which of the following is an example of where Behavioral Economics is being used?

a. To discourage texting, a huge tax is placed on its use

b. To encourage people to buy more hamburgers, a firm lowers its price

c. To encourage people to buy an item, you don't just show its price but show the price as being marked down from a higher price

d. To discourage people from using plastic bags at grocery stores, people are suddenly charged $0.50 per plastic bag

e. No example can be given because Behavioral Economics does not exist

10. Behavioral Economics has been used to help people make better choices without depriving them of the right to make their own decisions.

True

False