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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) 10%.
(c) 16%.
(d) 20%.

2. When did the CIA obtain information that al-Qaeda might be planning a major attack against the United States?
(a) January 2, 2000.
(b) September 9, 2001.
(c) July 10, 2001.
(d) March 12, 2001.

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 others invested in the stock have faith in its ability to produce.
(b) Whether the firm is a new firm or an old firm.
(c) Whether the information about the firm is already incorporated in the price of its stock.
(d) Whether the firm has many stockholders or few.

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

5. Who is the intellectual leader of an association of scholars against the author's works who call themselves NDM's?
(a) Malcolm Gladwell.
(b) Baruch Fischhoff.
(c) Gary Klein.
(d) Danny Oppenheimer.

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

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

8. What term refers to the quality of being noticeable or important?
(a) Heuristic.
(b) Endowment.
(c) Salience.
(d) Articulate.

9. Who are the authors of Built to Last?
(a) Keith Stanovich and Richard West.
(b) Baruch Fischhoff and Gary Klein.
(c) Christopher Chabris and Daniel Simons.
(d) Jim Collins and Jerry I. Porras.

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

11. 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."

12. In the author's description of the cold-pressor experiment, how long were the trials separated?
(a) Two minutes.
(b) Ten minutes.
(c) Twenty minutes.
(d) Seven minutes.

13. The author asserts that errors of prediction are inevitable for what reason?
(a) Because the world is unpredictable.
(b) Because we do not have the math to calculate the future.
(c) Because humans lack objectivity.
(d) Because humans lack statistical knowledge.

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

15. 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) Availability fallacy.
(c) Ego fallacy.
(d) Confidence fallacy.

Short Answer Questions

1. The author notes in Chapter 30 that what "is similar to the psychology of terrorism" (619)?

2. What aspect of the mind answers the question: "How was it, on the whole" (734)?

3. 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)?

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

5. The author points out in Chapter 31 that professional golfers putt more successfully when doing what?

(see the answer keys)

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