Question 1

Once people hear what the majority of individuals like them are doing, they are most likely going to choose:

Accepted Answer

A)  something better, because they want to be special.
B)  something slightly worse, because they don't want to be taken advantage of.
C)  the same, because they don't like to be outliers.
D)  None of these are likely choices.E) None of the above
F) All of the above

Question 2

Jessica's workplace is collecting money for a lottery pool. Each employee can choose to contribute $50, with a 1 in 600,000 chance of winning $1 million. If Jessica chooses not to contribute to the lottery pool, she is probably experiencing:

Accepted Answer

A)  positive framing.
B)  the endowment effect.
C)  loss aversion.
D)  status quo bias.E) B) and D)
F) All of the above

Question 3

Choice architecture is the:

Accepted Answer

A)  organization of the context and process in which people make decisions.
B)  structure that forces utility-maximizing decisions for individuals.
C)  political framework under which policy is made.
D)  the mental framework people use to make all of their decisions.E) None of the above
F) A) and B)

Question 4

In choice architecture, a "bad choice" is one that:

Accepted Answer

A)  policymakers want to nudge participants away from.
B)  the chooser will regret later.
C)  is considered not optimal by the choice architect.
D)  policymakers consider not optimal for society, despite benefitting the individual chooser.E) A) and C)
F) A) and B) B

Question 5

A heuristic is a:

Accepted Answer

A)  positive-framing method.
B)  mental shortcut that helps us make decisions.
C)  method to increase the price of your vices.
D)  formal policy used by firms to drive employee behavior.E) A) and B)
F) C) and D)

Question 6

Suppose studies show that 12 percent of all teens choose to participate in underage drinking. If policymakers wish to reduce the amount of underage drinking, they should create an advertisement that:

Accepted Answer

A)  focuses on the dangers of underage drinking, without boring teens with statistics.
B)  takes advantage of the status quo bias, encouraging teens to avoid drinking in order to improve their status.
C)  discloses the statistic, informing teens that a majority of teens do not engage in underage drinking.
D)  shares other statistics related to the unsafe practices of underage drinking and drinking while driving.E) B) and C)
F) A) and D)

Question 7

Commitment devices can be: a tool to help people avoid temptation. an informal arrangement. designed using the endowment effect.

Accepted Answer

A)  I and II only
B)  II and III only
C)  I only
D)  I, II, and IIIE) A) and B)
F) A) and C)

Question 8

When considering choice architecture, a nudge:

Accepted Answer

A)  only provides participants with choices that are good for them.
B)  can sometimes accomplish public policy goals in a less expensive way than traditional methods.
C)  presents choices that are similar to, but more equitable than, participants' ideal choices.
D)  is a deliberate push by a choice architect to ensure all people behave a certain way.E) None of the above
F) C) and D)

Question 9

A person who asks, "Can you guess the height of the tallest living man? Is it more than 8 feet?" is using:

Accepted Answer

A)  anchoring.
B)  rule of thumb.
C)  time inconsistency.
D)  positive framing.E) All of the above
F) A) and D) A

Question 10

Choice architects know that whether something feels like a loss or gain often depends on how:

Accepted Answer

A)  it is framed.
B)  often the decision is made.
C)  much time you have to make the decision.
D)  large the outcome is.E) B) and C)
F) All of the above

Question 11

A mistake is a choice that:

Accepted Answer

A)  the chooser later regrets.
B)  is created by a choice architect but has unintended consequences.
C)  leaves society as a whole worse off, but may still benefit the chooser.
D)  policymakers think choosers should not make.E) C) and D)
F) A) and D)

Question 12

Neutral policy with respect to choice architecture is:

Accepted Answer

A)  not a clear concept in most choice scenarios.
B)  well established in all choice scenarios.
C)  the goal of all choice architects.
D)  generally regulated by state and federal government.E) C) and D)
F) A) and C) A

Question 13

Suppose a local government is trying to reduce rates of littering in a local park. One person suggests putting up signs saying, "90% of citizens dispose of their trash, helping to keep our park beautiful." Another person suggests putting up a different sign that says, "10% of citizen's litter, reducing the beauty of the park for others." Because individuals are influenced by _______, we would expect the _______ sign to work better at reducing littering.

Accepted Answer

A)  the endowment effect; first
B)  reverse psychology; second
C)  social norms; first
D)  anchoring; secondE) C) and D)
F) None of the above

Question 14

People respond better to _______ framing.

Accepted Answer

A)  negative
B)  any type of
C)  consistent
D)  positiveE) B) and C)
F) A) and D)

Question 15

Behavioral economists accept that: people try to maximize their well-being but sometimes make mistakes. most mistakes in behavior are unpredictable. they must remain neutral when designing choice architecture.

Accepted Answer

A)  I only
B)  II and III only
C)  I and III only
D)  I, II, and IIIE) B) and C)
F) None of the above

Question 16

Suppose a researcher is running an experiment. Each participant is given $10. Half of the participants are presented with option (1) : "Would you accept a fifty-fifty chance of losing $3 or gaining $5?" The other half are presented with option (2) : "Would you accept a fifty-fifty chance of gaining either $7 or $14?" Knowing that individuals are subject to _______, we would expect higher acceptance rates for participants offered with option (2) .

Accepted Answer

A)  framing bias
B)  time inconsistency
C)  status quo bias
D)  anchoring biasE) A) and D)
F) A) and C)

Question 17

Disclosing information in more usable ways to decision-makers:

Accepted Answer

A)  can decrease the occurrence of rational ignorance in decision-making.
B)  can nudge people toward making better decisions.
C)  has been useful in achieving desired outcomes, such as convincing more people to buy gas-efficient cars.
D)  All of these are true.E) B) and C)
F) A) and D)

Question 18

Commitment devices:

Accepted Answer

A)  need strong commitments that are hard to get out of in order to be successful.
B)  never have strong commitments that are hard to get out of.
C)  can be successful whether they have strong or weak commitments.
D)  are only successful if they have weak commitments that are easy to break.E) C) and D)
F) A) and D)

Question 19

The endowment effect is the tendency to:

Accepted Answer

A)  place a higher value on something a person already owns simply because they own it.
B)  have a harder time parting with wealth the longer that wealth has been held.
C)  believe one holds a particular skill because someone told them they do.
D)  want to bestow one's own beliefs on others when making decisions.E) All of the above
F) A) and B)

Question 20

Suppose Yasmin buys a new house and calls the utility company to turn on the electricity. Yasmin is assigned an energy provider that produces electricity from burning coal. She is allowed to choose a different provider that uses clean energy sources at a later date. Yasmin is likely to _______ based on the influence of _______.

Accepted Answer

A)  switch to a new provider; loss aversion
B)  switch to a new provider; the endowment effect
C)  stick with the assigned provider; the commitment effect
D)  stick with the assigned provider; status quo biasE) A) and D)
F) A) and B)

Exam 23: Public Policy and Choice Architecture

Once people hear what the majority of individuals like them are doing, they are most likely going to choose:

Correct Answer
verified

Jessica's workplace is collecting money for a lottery pool. Each employee can choose to contribute $50, with a 1 in 600,000 chance of winning $1 million. If Jessica chooses not to contribute to the lottery pool, she is probably experiencing:

Correct Answer
verified

Choice architecture is the:

Correct Answer
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In choice architecture, a "bad choice" is one that:

Correct Answer
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B

A heuristic is a:

Correct Answer
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Suppose studies show that 12 percent of all teens choose to participate in underage drinking. If policymakers wish to reduce the amount of underage drinking, they should create an advertisement that:

Correct Answer
verified

Commitment devices can be: a tool to help people avoid temptation. an informal arrangement. designed using the endowment effect.

Correct Answer
verified

When considering choice architecture, a nudge:

Correct Answer
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A person who asks, "Can you guess the height of the tallest living man? Is it more than 8 feet?" is using:

Correct Answer
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A

Choice architects know that whether something feels like a loss or gain often depends on how:

Correct Answer
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A mistake is a choice that:

Correct Answer
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Neutral policy with respect to choice architecture is:

Correct Answer
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A

Correct Answer
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People respond better to _______ framing.

Correct Answer
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Behavioral economists accept that: people try to maximize their well-being but sometimes make mistakes. most mistakes in behavior are unpredictable. they must remain neutral when designing choice architecture.

Correct Answer
verified

Correct Answer
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Disclosing information in more usable ways to decision-makers:

Correct Answer
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Commitment devices:

Correct Answer
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The endowment effect is the tendency to:

Correct Answer
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Correct Answer
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Exam 23: Public Policy and Choice Architecture

Once people hear what the majority of individuals like them are doing, they are most likely going to choose:

Correct AnswerverifiedShow Answer

Jessica's workplace is collecting money for a lottery pool. Each employee can choose to contribute $50, with a 1 in 600,000 chance of winning $1 million. If Jessica chooses not to contribute to the lottery pool, she is probably experiencing:

Correct AnswerverifiedShow Answer

Choice architecture is the:

Correct AnswerverifiedShow Answer

In choice architecture, a "bad choice" is one that:

Correct AnswerverifiedB

A heuristic is a:

Correct AnswerverifiedShow Answer

Suppose studies show that 12 percent of all teens choose to participate in underage drinking. If policymakers wish to reduce the amount of underage drinking, they should create an advertisement that:

Correct AnswerverifiedShow Answer

Commitment devices can be: a tool to help people avoid temptation. an informal arrangement. designed using the endowment effect.

Correct AnswerverifiedShow Answer

When considering choice architecture, a nudge:

Correct AnswerverifiedShow Answer

A person who asks, "Can you guess the height of the tallest living man? Is it more than 8 feet?" is using:

Correct AnswerverifiedA

Choice architects know that whether something feels like a loss or gain often depends on how:

Correct AnswerverifiedShow Answer

A mistake is a choice that:

Correct AnswerverifiedShow Answer

Neutral policy with respect to choice architecture is:

Correct AnswerverifiedA

Correct AnswerverifiedShow Answer

People respond better to _______ framing.

Correct AnswerverifiedShow Answer

Behavioral economists accept that: people try to maximize their well-being but sometimes make mistakes. most mistakes in behavior are unpredictable. they must remain neutral when designing choice architecture.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Disclosing information in more usable ways to decision-makers:

Correct AnswerverifiedShow Answer

Commitment devices:

Correct AnswerverifiedShow Answer

The endowment effect is the tendency to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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B

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A

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A

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