Exam

Would you expect the price per ounce of Yuengling and Corona (for example) to be higher for beer in bottles or in cans?

bottles

Gladwell states that children instinctively look at people's faces when they seek an explanation of something that has transpired that they do not understand. Why do toddlers (generally) immediately look up into a person's eyes when they are confused?

can see the answers in the face

Paul Slovic's work on human judgment of risk offers a picture of Mr. and Mrs. Citizen that is:

described by all of the above.

Which type of professional asserts that "the real me is the me revealed by my actions"?

economist

Optimization plus what equals economics?

equalization

The availability bias is the human tendency to think that:

examples of things that come readily to mind are more representative than is actually the case.

Von Neumann is most closely associated with the theory of

expected utility

Christmas Clubs were never popular because they have no liquidity, high transaction costs, and a near-zero rate of return.

f

Thaler and Sunstein stress that people are:

fallible and life is difficult

When people attempt to estimate categories such as the main reasons people die, there is evidence to suggest that their estimates are:

warped because media coverage focuses more on novelty.

Based on what you've learned in Chapter 6 of Blink, why might the saying "put on a happy face" be wise counsel?

Correct! Smiling can induce oneself to become happier.

According to Blink, mind-reading failures are not always obvious and spectacular. Rather, they are

Correct! Subtle Correct! Complex Correct! Common

Expressions alone are sufficient to create marked changes in our autonomic nervous system.

Correct! True

Ekman's system of facial action coding has been used: .

Correct! by Pixar. Correct! by DreamWorks. Correct! to study schizophrenia. Correct! to study heart disease

Mental accounting is the system that households use to:

Correct! evaluate, regulate, and process their home budget.

To what extent are people's facial expressions culturally determined, according to the most current experts cited by Gladwell? Facial expressions are:

Correct! inherent in expressing human emotions.

What is the primary goal of constrained optimization?

Correct! minimizing or maximizing a function subject to certain constraints

According to Nudge, chapter 5 on choice architecture, what is the most important modification that must be made to a standard analysis of incentives?

Correct! salience

Anomaly or not: Most neighbors who take their children trick-or-treating respect the request "please take only one."

yes

Anomaly or not: People prefer avoiding losses rather than acquiring equivalent gains.

yes

If all of the assumptions for perfectly competitive markets hold, business firms will earn:

zero economic profit in the long run

The statistician Howard Wainer drew up a long list of eminent researchers who did what?

''The statistician Howard Wainer has drawn up a long list of eminent researchers who have made the same mistake- confusing mere correlation with causation". Regression and correlation effects have lead to confused inference of causation in many studies.

The correlation coefficient between two measures is equal to ____ if they are completely uncorrelated and is equal to ____ if they are completely correlated.

0; 1

According to Gladwell, how long did it take for intuitive repulsion to occur among the art experts who looked at the kouros statue?

2 seconds

How many distinct muscular movements did Ekman and Friesen determine the face could make (i.e., how many "action units")?

43

Would a person who follows actors, models, and other stars over or under-estimate the divorce rate for such celebrities?

A person who follows celebrities would over estimate the divorce rate because there are almost always someone's celebrity divorce in the tabloids. Almost every single celebrity who marries also divorces and it's not uncommon for celebrity divorces to occur after less than 2 years of marriage. The readily availability of this frequently reported divorce occurrence will play into the celebrity following person's availability bias.

Self-control issues are most likely to arise when choices and consequences are separated in time.

Answer 1:Correct!choices Answer 2:Correct!consequences Answer 3:Correct!separated

Provide one example of asymmetric information that is present in the interactions among all participants in the market for this course (ECON 3200).

Any correct scenario is accepted. For example, students have different information from the professor. The administration has information neither the students nor the professor have. Offer an example of something specific in this regard (for example, students know if they are copying one another's answers, while the administration does not).

In a constrained optimization problem, what are constraints?

Conditions that must be satisfied by the solution

Which of the following reasons do the authors of Nudge site as permitting people to be nudged.

Correct Answer We like to conform to what others are doing Correct Answer The spotlight effect We are susceptible to priming

Economists talk about "demand" and "quantity demanded", and "supply" and "quantity supplied." Explain the difference between demand and quantity demanded OR supply and quantity supplied. (Your answer should be three sentences at most.)

Demand is an association of prices and quantities that represents consumers' willingness and ability to purchase a good or service. Quantity demanded is the given quantity a consumer is willing to purchase at the given price at a particular point in time.

Gladwell quotes Klin: "all of us gravitate towards things that mean something to us." Knowing what you now know about bias (both conscious and subconscious), is this human desire to gravitate towards things that mean something to us contradictory to a desire to be unbiased? Does Gladwell attempt to reconcile this discrepancy in his logic? Briefly justify your response.

Gladwell does not attempt to reconcile this discrepancy in his logic. It is not possible to inherently gravitate and yet not have any bias. They are incompatible.

Write approximately 100 words explaining how you think Gladwell might refute or support Freud's assertions. Please ask if you have any questions about answering this question! Because it is worth four points out of 10, it is critical that you understand the question aske

Gladwell introduces a psychologist named Gottman. Gottman used data and math to analyze marriages based on SPAFF and heartrates. He took an hour to analyze moment to moment facial and verbal expressions. He later found that he could make snap judgments much quicker. People perform "thin-slicing" judgments all the time. Gladwell goes on to explain while there is a science to analyzing human behavior accurately, people can make "thin-slice" unconscious decisions rapidly without the analytics. People have the capability to quickly make judgments meaning there is information and knowledge being held in our unconscious. It is not completely up to our conscious to be able to perceive a situation. He calls this the adaptive unconscious in his book. Gladwell believes the unconscious to be extremely valuable rather than disruptive and threatening. Any answer that reflects such a perspective is appropriate if well-supported and well-written. See Simply Psychology, available Freud and the Unconscious Mind (Iceberg Theory) (simplypsychology.org) https://www.simplypsychology.org/unconscious-mind.html

Are government-run organizations generally more efficient or less efficient than privately-run organizations? Justify your response using economic concepts.

Government-run orgs are typically less efficient because they have the free rider problem and are not subject to the free market Private companies seek to maximize their profit by producing a quantity such that marginal revenue equals marginal cost of production. They seek to lower costs in order to increase their profit. Governments are not motivated by profits but rather by social goals. Because they are not responsible for maintaining low costs, they are not compelled to be as efficient as private firms.

According to Gladwell, what made Harding a bad president?

He had numerous affairs

Gottman asserts that people might lie or they might not know the truth about themselves, so that asking them questions about themselves and their relationships is not useful in determining personality traits. To what extent do you believe this to be true? Your answer should be approximately 50 words, based on the information presented in Blink. Your Answer:

I agree with this to a maybe 50% extent. On one level, I believe that we know ourselves better than anyone. After all, we are the only ones that spend 100% of our time with ourselves and know every single one of our habits. However, our perception of ourselves are skewed by our intentions. We may intend to do or be a certain way but it may not in full be reality. We may be more reactive to our environment or to others than we think and we may not report this about ourselves in a survey. Or people may think of themselves more negatively or positively than what is true. Or people may believe that they are more forth coming than in reality.

People crave associations with people like themselves; they want to fit in with a group and seek others with similar interests and beliefs. Consider for example with whom you live, play, and study. Are you a member of a club or an association? Suppose you want to attempt to retrain your mind to have a different first impression about another group that differs from yours. According to Gladwell this requires that you change your life so that you are exposed to those others. Name one difficulty that might ensue if you attempt to follow that suggestion. Your answer should be three sentences or fewer.

I have a condition. I am on the receiving end of forms of discrimination. I have developed the bias that able people are unempathetic.

Do you think it is possible to judge a person's needs and state of mind without simultaneously judging his or her appearance? Justify your response in no more than two sentences. Your Answer:

I think it's possible. I think the more experience and the more connections you make with people, the more biases toward appearances fade away.

Which of the following statements best characterizes normative decision theory?

It prescribes how decisions should be made

According to the information in Blink, do speed-daters want what they say they want?

NO

chair

People automatically gravitate toward a chair with the most presumed status. They probably assumed I'd prefer it.

Offer one example that you have thought of on your own that illustrates the property of transitivity. Be sure to indicate explicitly how your example illustrates the property.

The Electoral College can be an illustrations of property of transitivity. If a voting district A, votes B, then the Electoral College, C also votes B then the Electoral College and the voting district must both have the interest of B. If a > b and b > c then a > c. Any example where this is represented is fine.

Which of the following best describes hindsight bias in decision-making?

Seeing events as having been predictable after they have occurred

Consider the model of market equilibrium. What can be expected to happen (if anything) to the market price and market quantity of bicycles given the unusually high price of gas? (Your answer should be three sentences at most.)

Shift the demand curve to the right to reflect an increase in demand (consumers choose bikes as a substitute for cars). Reading the graph, equilibrium price and quantity both increase.

Consider the model of market equilibrium. What can be expected to happen to the equilibrium price and quantity of cow paintings if the cost of paint falls?

Shift the supply curve to the right to represent a decrease in cost of one of the inputs in cow paintings (the paint). Reading from the graph, the equilibrium price falls and quantity increases.

Officials in Minnesota conducted an experiment by offering taxpayers four different kinds of information; which of these had a significant effect on improving tax compliance?

Stating that over 90 percent of Minnesotans had already complied

What is the part of the brain that "leaps to conclusions"?

The adaptive unconscious.

Why is it necessary for economists to assume rationality? (Your answer should be three sentences at most.)

The assumption of rationality allows economists to believe that people act in their own best interest. This is an important belief while analyzing people's choice. Rationality means that individuals act in a way to maximize their payoff given their beliefs about the environment and about what others in that environment will do. The assumption allows economists to model behavior wherein players act in predictable ways based on their preferences and beliefs.

Psychologists Tversky and Kahneman identified three heuristics (or rules of thumb) in 1974. List and briefly define each (one sentence for each of the three is sufficient).

The heuristic representativeness is when a person believes a risk is higher or a reality being more prevalent because that is what gets more representation in the media or in their social circle. Availability heuristic is a recent event or availability of an opportunity to influence how likely that event or opportunity will occur. Anchoring is the more you ask for it the more likely you will get it however people may resist just because of reactance.

kenna

They didn't have the additional information needed to appreciate his music - they had not seen him face to face, had not heard him in studio, and not seen his video on MTV.

According to Gladwell, why do people "thin-slice"?

They have to in order to make sense of something quickly.

According to Gladwell, why is it difficult to show respect for others through texts, online discussions, and posts?

To make thin slice judgment our adaptive conscious takes in many bits of information in an instant. It is very difficult to perceive the bits of information needed to make the thin slice judgment in order to open up the warmth of showing respect to a person. Page 43: "the simplest way that respect is communicated is through tone of voice." Without the ability to speak and change tone of voice, communicating respect becomes more difficult

Anomaly or not: The disutility of giving up an object is greater than the utility associated with acquiring it.

Yes

How likely is it that a person admitted to a hospital on suspicion of having a heart attack is actually having a heart attack?

Your Answer: 10% of patients who suspect a heart attack are actually having one so not very likely

Offer one original example of a "snudge". For full credit, you must first define what a snudge is (one sentence is sufficient). Then offer an example not found in the book or other source, but rather from your own imagination or experience.

Your Answer: A snudge is a "self-nudge". A snudge that I do is keep dry erase markers next to my mirror and when I am feeling like giving up I write a positive note to myself to keep my mind focused on positivity and not how crappy I feel.

What does Gladwell state about a person making a decision having too much, or extra information, about a particular scenario or event?

Your Answer: It's "useless" "The extra information is more than useless. It's harmful. It confuses the issues

If cartoon characters decrease the perception of the taste and quality of a food product, why are cartoon characters on so many boxes of cereal?

Your Answer: Kids influence parents to buy them their food. Cartoons appeal to kids. It is a marketing tool. It also could appeal to someone's inner child if it was strong enough. Adults purchase the food, and often purchase the food their children beg for the most ardently. Children do not perceive quality similarly to adults; they do not necessarily care about the quality of the food. The marketing tactic is not about quality but about attracting the attention of children.

What is the "hot-cold empathy gap" and why does it exist? Your answer should first briefly define the hot-cold empathy gap (one sentence is sufficient), then explain why it exists (again, no more than one sentence is needed).

Your Answer: The hot-cold empathy gap happens when it is hard for one to understand the opposite of their current emotion such as angry when they are happy and vice versa. We underestimate how much emotions motivate action.

Students often enjoy the anonymity of online interactions; they profess that they are more able to be who they want to be in an anonymous environment. However, Gladwell quotes Ekman: "I don't think .... friendships and closeness would occur if our faces didn't work that way." Is Ekman simply out-of-touch with younger people? To what extent is closeness dependent on our ability to see facial expressions and signals, if at all?

Your Answer: The universality of facial expressions from culture to culture proves there to be an innateness to facial expressions. If this can be true from culture to culture then it would be true from generation to generation. However, there may be a new component to learn about facial expressions during technology use. I personally do not relate to the liking of online anonymous interactions. I don't feel that they are understood the same as if we were able to speak face to face even if we used the exact same words. Closeness definitely depends on being able to see facial expressions. Long distance relationships can be held only so closely without ever seeing the other person's face and just keeping in touch via phone, email, and letters. In person interactions are just different. People can definitely develop a closeness with only words and no facial expressions but it's always deeper being able to be in person and having face to face time.

Provide one original example (i.e., an example you have thought of on your own not using google, chatgpt, or any other resource!) of the Weber-Fechner Law.

Your Answer: Weber-Fechner Law describes the just noticeable difference. For example, if I am at the grocery store and I normally buy paper towels in bulk, I am less likely to notice a $1 raise if it goes from $17 to $18. However, if I normally buy the expensive organic peanut butter that is considerably more expensive than the other brands, I am more likely to notice the raise from $7 to $8 and it may even incline me to buy one of the standard brands opposed to buying the paper towels in bulk without thinking twice of the dollar raise.

Surveys have limited usefulness. People tend to have great difficulty evaluating something that they do not yet have or have not experienced. Additionally, they tend to underestimate the value of a product or service for which they believe they may have to pay, and to overestimate the value of a product or service that they think may be given to them freely. Would Richard Thaler believe the prior sentences are true or false?

false

Which of the following does Gladwell state effectively experience a handicap to corporate success?

female short people

Which of the following is the best example of a product or service that generates external benefits or costs?

fireworks

The authors define the golden rule of libertarian paternalism as the notion that people need nudges in all of the following cases except when:

free markets allow them to avoid making difficult choices.

Conscious attitudes are what we choose to believe and use to direct our behavior. Our second level of attitude is unconscious. These thoughts are

immediate automatic

Economist Howard Kunreuther noticed that availability effects help explain the pattern of:

insurance purchase and protective action after disasters.

People with damage to the ventromedial prefrontal cortex

lack judgment

Knowing that a person prefers green bean casserole to Brussel sprouts and mashed potatoes to green bean casserole, which serving dish should be passed to that person first, mashed potatoes or Brussel sprouts?

mashed potatoes

Adding human behavior to economic theory leads to

more accurate predictions

Competitive markets cannot always protect consumers from scams, such as the "snake oil" example described in the reading, because:

much of the time, more money can be made by catering to human frailties than by helping people to avoid them.

What types of products are most vulnerable to market research?

new and unique/different markets

Anomaly or not: Subtle changes in the way choices are presented to individuals influences their decision-making without restricting their options.

no

Is it wise to judge others based on things beyond their control, for example, their height or skin color?

no

To what extent do you think their appearance factored into their current political success? Do you feel more inclined to support people you find physically attractive, or do you have a negative association with people who you believe to be physically attractive? According to Gladwell, are most people able to separate their favor towards a given politician from their unconscious bias?

no

Intuitive predictions need to be corrected because they are:

not regressive and therefore are biased.

Life __________ presents us with occasions to forecast.

often

Choose the best answer to the following sentence: Gladwell states that facts about people's appearance can trigger what?

powerful associations

Unconscious associations are known by psychologists as [ ]

prejudices implicit unthinking natural

Consider the experience of your professor who was presented with a similar tipping suggestion at a Washington D.C. restaurant last month. The tip options shown (for a party of three) were 22%, 25% and 30%. A 30% tip seemed rather excessive for this particular chain-restaurant, and was "off-putting". What behavioral phenomenon likely resulted from this feeling of being ordered around?

reactance reactance occurs when people are pushed too far (ordered or nudged to do something beyond their view of reasonability), and they may then do the opposite of what is being ordered or suggested.

When a company offers consumers a free three-month subscription, they are counting on the fact that many consumers will neglect to cancel once the free subscription has expired due to what?

status quo

Extreme predictions and a willingness to predict rare events from weak evidence are both manifestations of ________________.

system 1

Businesses and government can use the power of social influence to promote many good (and bad) causes.

t

For any node of a choice architecture system, there must be an associated rule that determines what happens to the decision maker if she does nothing.

t

Friedman argued "that it was silly to evaluate a theory based on the realism of its assumptions." If the realism of a theory's assumptions is not the basis, what should be?

the accuracy of the theory's predictions

According to Cheskin, the product being sold is the package and the product combined.

true

Gladwell writes that many people viewed Morris' obsession with polling (as an advisor to President Clinton) as deeply problematic "as a corruption of the obligation of elected officials to provide leadership and act upon principle." He then writes "In truth, that's a little harsh..... Everyone wants to capture the mysterious and powerful reactions we have to the world around us." What two words in the above sentence (the latter sentence) are examples of priming?

truth and everyone Truth cannot be asserted - Gladwell cannot dismiss as invalid the opinions of those who found such polling morally wrong. Everyone cannot be asserted - Gladwell cannot claim that everyone wants this without evidence to support this. These words prime our brains to agree with the arguments that follow in this chapter and the next.

Is thin-slicing conscious, preconscious, or unconscious?

unconscious

snap judgements are

unconscious

What is the term for the inability to describe something that you can immediately recognize (for example, you can recognize your Uber driver but not be able to describe him accurately)?

verbal overshadowing