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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

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

2. How many pairs of competing companies are analyzed in Built to Last?
(a) 18.
(b) 12.
(c) 8.
(d) 16.

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

4. 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) "Loss aversion causes narrative fallacies."
(c) "Diminishing sensitivity causes risk seeking."
(d) "Risk seeking behavior causes extremely loss aversive choices."

5. Who introduced the term "affective forecasting"?
(a) Baruch Fischhoff.
(b) Daniel Gilbert and Timothy Wilson.
(c) John List.
(d) Christopher Hsee.

Short Answer Questions

1. 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?

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

3. What psychologist demonstrated disgust by relating that one cockroach could ruin the appeal of a bowl of cherries, but that one cherry would not do anything for a bowl of cockroaches?

4. What is the conclusion of the paper "Trading is Hazardous to Your Health"?

5. What aspect of the mind answers the question: "Does it hurt now" (734)?

Short Essay Questions

1. What is a framing effect?

2. What is the expected utility hypothesis?

3. What is the initial gamble that Paul Samuelson famously asked a friend?

4. What is the endowment effect?

5. What is the principle of diminishing sensitivity?

6. What are the three qualifications when deciding whether or not to accept a small risk with positive expected value?

7. What is the principle of loss aversion?

8. How does the author assert terrorism works in Chapter 30?

9. What is a correlations coefficient?

10. Wht is duration neglect?

(see the answer keys)

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