HSDF 183" Quiz 2.1: Thinking Money

Behavioral economics assumes we're all rational consumers making logical choices based on the best financial information.

F

People who see images of their future selves put less money into the retirement fund.

f

The human tendency is for people to hand over money to a crook/con artist because of the fear of missing out on an investment opportunity.

T

When given more retirement plan options, fewer employees are less likely to make a choice.

T

Any time you refuse to sell something for an amount that is more than you would pay for it, you are experiencing...

the endowment effect

Thinking Money discussed an experiment with volunteers were served wine through a tube, while lying inside a magnetic resonance imaging machine, or MRI. What is true about the experiment?

Brain scans found people enjoyed the expensive wine more

People who use Stickk.com can designate payment to an organization they detest if they fail to reach their savings goal by a certain date.

T

Mental accounting violates what economic principle?

Money is fungible

For some people, using a commitment contract has been shown to be effective in reaching a savings goal by a certain date.

t

Our brains are intoxicated by price — the more we think something costs, the better we like it.

t