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

Multiple Choice Questions

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

2. The author offers a scenario in which a subject purchases a $200 concert ticket to see their favorite band. They find that others are offering $3,000 for the ticket, but they do not sell it. What is this an example of?
(a) Endowment effect.
(b) Narrative fallacy.
(c) The availability cascade.
(d) Theory-induced blindness.

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

4. Who is the finance professor at U.C. Berkeley who created a study wherein he examined the trading records of 10,000 brokerage accounts of individual investors over a seven-year period?
(a) Malcolm Gladwell.
(b) Terry Odean.
(c) Jim Collins.
(d) Baruch Fischhoff.

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

6. One of the decision problems that Kahneman and Tversky examined (as discussed in Chapter 25) was whether one would choose a coin toss in which the winner wins $100 or what?
(a) Getting $46 for certain.
(b) Getting $80 for certain.
(c) Losing $20.
(d) Losing $50.

7. How is the decision construction of broad framing defined by the author?
(a) A single decision with two options.
(b) Two simple decisions, considered separately.
(c) Four simple decisions, considered separately.
(d) A single decision with four options.

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

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

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

11. What method is referred to by the author with the acronym DRM?
(a) Day Reconstruction Method.
(b) Diagnostic Reconstruction Method.
(c) Dream Revival Method.
(d) Detrimental Reliance Method.

12. Who wrote the 2005 book Expert Political Judgment: How Good Is It? How Can We Know?
(a) Malcolm Gladwell.
(b) Philip Tetlock.
(c) Baruch Fischhoff.
(d) Jim Collins and Jerry I. Porras.

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

14. In utility theory, the utilty of a gain is assessed by comparing what?
(a) The base rates of the subject.
(b) The utilities of two states of wealth.
(c) The axioms invested in the states of wealth.
(d) The heuristics of the subject.

15. What psychologist conduted an experiment wherein he recruited fans of professional basketball and elicited judgments concerning the winner of the NBA playoffs?
(a) Nassim Taleb.
(b) Shane Frederick.
(c) Craig Fox.
(d) Larry Jacoby.

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. Where was John von Neumann originally from?

3. Who proved mathematically that attempts to explain loss aversion by the utility of wealth are doomed to fail?

4. 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?

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

(see the answer keys)

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