Prospect theory accounts for which of the following: People are generally risk seeking for losses and risk aversion for gains Losses are more impactful than gains People evaluate options as changes from a reference point, not in relation to their total wealth position All of the above A and B only. Question 14 4pts Imagine that a group of people watched a political debate- the same debate at the same time - and Republican supporters believed that the Republican candidate won the debate, while the Democrats were equally sure that their candidate won. Which bias is most likely behind these conflicting opinions? Omission bias Illusion of control Confirmation bias/confirming evidence trap Curse of knowledge Anchoring bias One should be careful when working with groups to make decisions because we know that: Groups tend to make more extreme decisions than individuals do. Groups tend to make more conservative decisions than individuals do. Groups always make worse decisions than individuals do. Groups tend to be better at brainstorming than individuals are. We really do not need to be careful because two heads are better than one! Question 17 Choosing to flip a coin to decide is an example of: A win-win alternative A time buying alternative A process alternative An information gathering altemative A poor way to make a.decision The availability heuristic is a decision shortcut in which we judge how likely something is based on: emotional evaluations the similarity of the current situation to successful and unsuccessful previous events how easily similar examples come to mind whatever information is in front of you outside information Question 19 4pts We often practice "mental accounting" which means we: Use our brains to manage our money. Give up on figuring out what we should do with our money because it is too difficult. Consider money from different sources or for different purposes as being in different "mental" accounts Mentally consider how much money we have in the bank when making big purchases. Think about what ourlives would be like if we had a huge increase in our wealth