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

2. 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 the world is unpredictable.
(c) Because humans lack objectivity.
(d) Because humans lack statistical knowledge.

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

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

5. 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 feelings."
(b) "Their history."
(c) "Their logic."
(d) "Their confidence."

Short Answer Questions

1. Where was John von Neumann originally from?

2. 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?

3. Who designed the study along with Kahneman that involves two patients undergoing a painful colonoscopy?

4. Who wrote that "chances of rare events (such as the burst of housing bubbles) receive less impact than they deserve according to their objective probabilities" (639)?

5. What is the title of the essay that Kahneman and Tversky wrote on the study of gambles?

Short Essay Questions

1. What story from Malcolm Gladwell's book Blink does the author present?

2. Why does the author credit Virginia Apgar with saving the lives of many infants?

3. What does "hedonimeter" refer to?

4. How does the author describe regret in economics?

5. What is the endowment effect?

6. What is the expected utility hypothesis?

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

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

9. Why does Kahneman cite the book Expert Political Judgment: How Good Is It? Who wrote this book?

10. Why was Kahneman astonished upon reading an essay by Bruno Frey?

(see the answer keys)

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