A) Adam to save more as he would set up a 10 percent automatic withdrawal while Becky would stay at the default of 8 percent.
B) Becky would save more,as both would tend to stay at the defaults provided by their employers.
C) them both to save 10 percent eventually,as both had predetermined that that was the optimal amount to save.
D) Becky to feel a greater sense of loss by seeing funds automatically withheld each month.
F) A) and B)
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A) Overconfidence effect.
B) Availability heuristic.
C) Self-serving bias.
D) Confirmation bias.
F) A) and D)
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A) weighed the costs and benefits and made a rational economic decision to sleep in.
B) used System 1 of his brain to formulate his workout plan,but then gave in to System 2 when he chose to sleep in.
C) used System 2 of his brain to formulate his workout plan,but then gave in to System 1 when he chose to sleep in.
D) is fundamentally lazy and incapable of sticking to a workout plan.
F) None of the above
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B) False
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B) False
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A) framing effects.
B) confirmation bias.
C) self-serving bias.
D) planning fallacy.
F) All of the above
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A) tendency for policies with high short-run benefits to have high long-run costs.
B) fallacy that what is true for the short run must be true for the long run.
C) tendency to regularly misjudge in the present what you will do in the future.
D) tendency to misjudge how long it will take to accomplish a future task.
F) A) and B)
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B) False
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A) is too subjective to be considered in the analysis of economic behavior.
B) can be objectively standardized across individuals.
C) varies from one individual to another but still affects economic behavior in important ways.
D) matters to people,but because of self-interest fairness has little effect on their economic decisions.
F) A) and B)
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A) people can't improve their economic well-being because prices increase as fast as wages.
B) people can't get out of debt because credit card companies use anchoring to get consumers to carry large balances on their accounts.
C) increasing our level of consumption doesn't make us any happier in the long term.
D) feelings of loss offset our feelings of gain,leaving us no happier in the long term.
F) A) and C)
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A) Cognitive therapy.
B) Availability heuristics.
C) Loss aversion.
D) Fairness.
F) All of the above
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A) It should make no mention of fat content,either in absolute terms or relative to its regular sour cream.
B) It should advertise that the "low fat" sour cream has only "half the fat" of the regular sour cream.
C) It should advertise that the "low fat" sour cream has only 5 grams of fat per serving.
D) It won't matter what strategy Dairy Barn uses,as consumers are sufficiently informed as to not be affected by the advertising.
F) A) and D)
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A) Both would expect prices to rise significantly,whether from market forces or from self-interest overwhelming any sense of compassion for others.
B) Both would expect sellers to keep prices unchanged,whether to keep customers happy long-term or out of a sense of fairness.
C) Neoclassical economists would expect economic chaos and collapse,while behavioral economists would expect everyone to act cooperatively.
D) Neoclassical economists would expect prices to rise dramatically as a natural result of the greater scarcity,and behavioral economists would expect prices to increase less or not at all as people try not to take advantage of the situation.
F) B) and C)
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A) There is little difference,as fairness considerations lead to similar splits of the money in both games.
B) The dictator game tends to result in a more even split of the money.
C) The ultimatum game tends to result in a more even split of the money.
D) Self-interest is revealed more strongly in the ultimatum game than in the dictator game.
F) A) and C)
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B) False
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A) Holding posted prices constant but reducing package sizes.
B) Providing discounts for buying in bulk.
C) Placing the most frequently purchased items at the back of the store.
D) Positioning high-profit kids cereals on the lower shelves of the cereal aisle.
F) B) and D)
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A) Unevolved capacity for solving modern problems and faulty heuristics.
B) Bad information and lack of impulse control.
C) Lack of intellect and mental disorders.
D) Inability to reason and inability to delay gratification.
F) None of the above
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A) are able to make better predictions about economic behaviors and outcomes.
B) ignore the mental processes by which these decisions are made.
C) believe that people never make suboptimal decisions.
D) believe it is best to limit the number of options people have available.
F) A) and C)
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B) False
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A) people are better able to process price changes than changes in product sizes.
B) people tend to be less risk averse.
C) people pay too little on their monthly credit card bills.
D) people isolate purchases and sometimes make irrational decisions.
F) A) and C)
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