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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. In the following example from Chapter 30, the author posits the following in regards to a person choosing a marble from an urn. The red marbles win a prize. "Urn A contains 10 marbles, of which 1 is red. Urn B contains 100 marbles, of which 8 are red" (631). What are the chances of winning in Urn B?
(a) 8%.
(b) 16%.
(c) 20%.
(d) 10%.

2. What organization paid for Thaler to spend a year working with Kahneman in Vancouver?
(a) The Russell Sage Foundation.
(b) The Spencer C. Kaufman Foundation.
(c) The Michael Conner Foundation.
(d) The Roosevelt Foundation.

3. Who coined the term "Econs and Humans"?
(a) Gary Klein.
(b) Richard Thaler.
(c) Bruno Frey.
(d) John Gottman.

4. Consider the following sentence from Chapter 19 where the author describes people who "knew well before it happened that the 2008 financial crisis was inevitable" (385). What objectionable word does the author point out in this sentence?
(a) Before.
(b) Crisis.
(c) Knew.
(d) Inevitable.

5. What term refers to the state that some artists experience in creative moments and other experience through films, books, etc.?
(a) Show.
(b) Glide.
(c) Flow.
(d) Axiom.

6. According to the author in Chapter 26, "In bad choices, where a sure loss is compared to a larger loss that is merely probable," what is the result (552)?
(a) "Loss aversion causes extremely risk-averse choices."
(b) "Diminishing sensitivity causes risk seeking."
(c) "Risk seeking behavior causes extremely loss aversive choices."
(d) "Loss aversion causes narrative fallacies."

7. Who was the founder of psychophysics?
(a) Bruno Frey.
(b) Richard Thaler.
(c) Gustav Fechner.
(d) John Gottman.

8. How many participants were involved with the author's study on the pain of colonoscopies?
(a) 95.
(b) 123.
(c) 10.
(d) 154.

9. How is the decision contruction of narrow framing defined?
(a) A single decision with two options.
(b) Four simple decisions, considered separately.
(c) A single decision with four options.
(d) Two simple decisions, considered separately.

10. Who was concluded to achieve better investment results in "Boys Will Be Boys"?
(a) Men.
(b) Bankers.
(c) Professors.
(d) Women.

11. In discussing the stock market, the author states that if all the assets in a market are correctly priced, it leaves no scope for cleverness but it also does what?
(a) Creates an availability cascade.
(b) Enacts executive control.
(c) Creates definitive axioms.
(d) Protects fools from their own folly.

12. Who was the director of the CIA when intelligence learned that al-Qaeda may be planning a major attack on the U.S.?
(a) Christopher Chabris.
(b) Baruch Fischhoff.
(c) George Tenet.
(d) Malcolm Gladwell.

13. How many fatalities came about as a result of bus bombings in Israel between December 2001 and September 2004?
(a) 23.
(b) 236.
(c) 366.
(d) 135.

14. What is the title of the essay that Kahneman and Tversky wrote on the study of gambles?
(a) "The Perception of Causality."
(b) "Belief in the Law of Small Numbers."
(c) "Introduction to Economics and Psychology."
(d) "Prospect Theory: An Analysis of Decision under Risk."

15. What dean of the University of Chicago Graduate School of Business was a firm believer in standard economic theory?
(a) John Gottman.
(b) Richard Rosett.
(c) Richard Thaler.
(d) Bruno Frey.

Short Answer Questions

1. With what economist did Kahneman and Thaler work closely in Vancouver?

2. The author states in Chapter 25, "Gambles represent the fact that the consequences of choices are" what (526)?

3. What part of the brain has a primary role as its threat center?

4. In the following example from Chapter 30, the author posits the following in regards to a person choosing a marble from an urn. The red marbles win a prize. "Urn A contains 10 marbles, of which 1 is red. Urn B contains 100 marbles, of which 8 are red" (631). What are the chances of winning in Urn A?

5. In the author's description of the cold-pressor experiment, how long were the trials separated?

(see the answer keys)

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