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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 A?
(a) 5%.
(b) 30%.
(c) 20%.
(d) 10%.

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

3. In assessing the stock market, the author asserts that skill in evaluating the business prospects of a firm is not sufficient for stock trading. Traders often lack the skill to answer what crucial question?
(a) Whether the information about the firm is already incorporated in the price of its stock.
(b) Whether the firm is a new firm or an old firm.
(c) Whether the firm has many stockholders or few.
(d) Whether others invested in the stock have faith in its ability to produce.

4. Who was the Nobel Prize-winning economist that proposed a theory where utility are attached to changes of wealth rather than to states of wealth?
(a) Harry Markowitz.
(b) John Gottman.
(c) Richard Thaler.
(d) Bruno Frey.

5. What term introduced by Nassim Taleb describes how flawed stories of the past shape our views of the present and the future?
(a) Narrative fallacy.
(b) Ego fallacy.
(c) Availability fallacy.
(d) Confidence fallacy.

6. Who is the heroine of La Traviata who dies after sacrificing for love?
(a) Anna.
(b) Sarah.
(c) Violetta.
(d) Maria.

7. With what economist did Kahneman and Thaler work closely in Vancouver?
(a) John Gottman.
(b) Jack Knetsch.
(c) Richard Thaler.
(d) Bruno Frey.

8. Who is the author of The Halo Effect?
(a) Malcolm Gladwell.
(b) Philip Rosenzweig.
(c) Baruch Fischhoff.
(d) Christopher Chabris.

9. The author points out in Chapter 31 that professional golfers putt more successfully when doing what?
(a) Trying to achieve a birdie while avoiding a bogey.
(b) Trying to achieve a birdie while ignoring the bogey.
(c) Avoiding a birdie rather than trying to achieve a bogey.
(d) Avoiding a bogey rather than trying to achieve a birdie.

10. Who first demonstrated the hindsight bias as a student in Jerusalem?
(a) Malcolm Gladwell.
(b) Baruch Fischhoff.
(c) John List.
(d) Christopher Chabris and Daniel Simons.

11. The author states in the opening of Chapter 29, "Whenever you form a global evaluation of a complex object--a car you may buy, your son-in-law, or an uncertain situation--you" do what (600)?
(a) "Evaluate the normalcy of the events or subjects."
(b) "Assign weights to its characteristics."
(c) "Seek advice from experience."
(d) "Make immediate assumptions."

12. The author notes in Chapter 36 that "Caring for people often takes the form of concern for the quality of their stories, not for" what (744)?
(a) "Their confidence."
(b) "Their history."
(c) "Their feelings."
(d) "Their logic."

13. Who wrote the bestseller book Blink?
(a) Malcolm Gladwell.
(b) Danny Oppenheimer.
(c) Baruch Fischhoff.
(d) Christopher Hsee.

14. The author presents several examples in Chapter 26 that demonstrate that there is no loss aversion in what kinds of interactions?
(a) Non-material interactions.
(b) Large investments in similar firms.
(c) Gambling exchanges.
(d) Routine commercial exchanges.

15. In Chapter 31, the author posits that the main motivators of money-seeking individuals (aside for the very poor) are what?
(a) Self-regard and achievement.
(b) Earning more money.
(c) Support and protection.
(d) Power and greed.

Short Answer Questions

1. What term does the author apply to the idea that once you have accepted a theory and used it as a tool in your thinking, it is extremely difficult to notice its flaws?

2. What organization paid for Thaler to spend a year working with Kahneman in Vancouver?

3. What creates an asymmetry that makes agreements difficult to reach?

4. The author states in Chapter 26, "In mixed gambles, where both a gain and a loss are possible," what happens (552)?

5. In Introduction to the Principles of Morals and Legislation, the author points out that "Nature has placed mankind under the governance of two sovereign masters" (728). What are these masters defined as?

(see the answer keys)

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