BEHAVIORAL ECONOMICS EXAMINATION QUESTIONS
AND CORRECT ANSWER WITH EXPLANATION GRADED
A+ STUDY GUIDE SOUTHERN NEW HAMPSHIRE
UNIVERSITY
1. Behavioral economics studies:
A. Machines only
B. Psychological influences on economic decisions
C. HR systems
D. Cooking systems
Answer: B
It combines psychology and economics.
2. Traditional economics assumes:
A. Irrational behavior
B. Fully rational decision-making
C. Emotional choices only
D. Random behavior
Answer: B
People are assumed rational.
3. Behavioral economics challenges:
A. Mathematics
B. Rational choice theory
C. HR theory
D. Cooking theory
Answer: B
It questions perfect rationality.
4. Bounded rationality means:
,A. Unlimited thinking
B. Limited cognitive capacity
C. Perfect decisions
D. HR limits
Answer: B
People have limited information processing.
5. Heuristics are:
A. Legal rules
B. Mental shortcuts
C. HR tools
D. Cooking tools
Answer: B
Simplified decision rules.
6. Bias in economics means:
A. Perfect judgment
B. Systematic error in thinking
C. HR bias
D. Cooking bias
Answer: B
Deviations from rationality.
7. Loss aversion means:
A. Gains > losses
B. Losses feel worse than gains
C. No losses
D. HR loss
Answer: B
People fear losses more.
8. Prospect theory was developed by:
, A. Adam Smith
B. Daniel Kahneman and Amos Tversky
C. Keynes
D. Friedman
Answer: B
Foundational behavioral theory.
9. Prospect theory explains:
A. Production
B. Decision-making under risk
C. HR decisions
D. Cooking decisions
Answer: B
How people choose under uncertainty.
10. Framing effect means:
A. No influence
B. Decisions depend on presentation
C. HR framing
D. Cooking framing
Answer: B
Same info, different outcomes.
11. Anchoring refers to:
A. Random decisions
B. Relying on initial information
C. HR anchoring
D. Cooking anchoring
Answer: B
First information influences judgment.
12. Overconfidence bias is:
AND CORRECT ANSWER WITH EXPLANATION GRADED
A+ STUDY GUIDE SOUTHERN NEW HAMPSHIRE
UNIVERSITY
1. Behavioral economics studies:
A. Machines only
B. Psychological influences on economic decisions
C. HR systems
D. Cooking systems
Answer: B
It combines psychology and economics.
2. Traditional economics assumes:
A. Irrational behavior
B. Fully rational decision-making
C. Emotional choices only
D. Random behavior
Answer: B
People are assumed rational.
3. Behavioral economics challenges:
A. Mathematics
B. Rational choice theory
C. HR theory
D. Cooking theory
Answer: B
It questions perfect rationality.
4. Bounded rationality means:
,A. Unlimited thinking
B. Limited cognitive capacity
C. Perfect decisions
D. HR limits
Answer: B
People have limited information processing.
5. Heuristics are:
A. Legal rules
B. Mental shortcuts
C. HR tools
D. Cooking tools
Answer: B
Simplified decision rules.
6. Bias in economics means:
A. Perfect judgment
B. Systematic error in thinking
C. HR bias
D. Cooking bias
Answer: B
Deviations from rationality.
7. Loss aversion means:
A. Gains > losses
B. Losses feel worse than gains
C. No losses
D. HR loss
Answer: B
People fear losses more.
8. Prospect theory was developed by:
, A. Adam Smith
B. Daniel Kahneman and Amos Tversky
C. Keynes
D. Friedman
Answer: B
Foundational behavioral theory.
9. Prospect theory explains:
A. Production
B. Decision-making under risk
C. HR decisions
D. Cooking decisions
Answer: B
How people choose under uncertainty.
10. Framing effect means:
A. No influence
B. Decisions depend on presentation
C. HR framing
D. Cooking framing
Answer: B
Same info, different outcomes.
11. Anchoring refers to:
A. Random decisions
B. Relying on initial information
C. HR anchoring
D. Cooking anchoring
Answer: B
First information influences judgment.
12. Overconfidence bias is:
