QUESTION 1 When we think about the value of what we own, most people would place

Question

QUESTION 1

When we think about the value of what we own, most people would place a higher value on our assets then what we would pay for those same items. This is referred to as

A. Motivation selling

B. Endowment effect

C. Acquisition utility

D. Transactional utility

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QUESTION 2

The term used to explain when we forgo making the best decision in favor of one that is “acceptable” or “reasonable” is known as?

A. Satisfice

B. Framing

C. Bias fulfillment

D. Hindsight bias

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QUESTION 3

There are four (4) general heuristics that we focus on, they are (1) the availability heuristic, (2) the representativeness heuristic, (3) positive hypothesis testing, and (4) the affect heuristic.

A. True

B. False

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QUESTION 4

What is a problem with too much information?

A. Time spent on issue/process

B. Decision avoidance

C. Creation of more issues/problems

D. Establishes a framework of benchmarks for decision making process that is not necessary.

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QUESTION 5

Decision making can be divided into:

A. Quantitative; Behavioral

B. Quantitative; Prescriptive

C. Prescriptive, Descriptive

D. Behavioral; Descriptive

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QUESTION 6

The term judgment is in reference to the cognitive aspects of decision making?

A. True

B. False

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QUESTION 7

From our reading we have learned that people adjust to both positive and negative changes in circumstances with surprising speed and then promptly forget that they did so?

A. True

B. False

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QUESTION 8

Bounded awareness often leads people to ignore accessible, perceivable, and important information; while paying attention to other equally accessible but irrelevant information

A. True

B. False

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QUESTION 9

The omission bias usually supports the status quo?

A. True

B. False

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QUESTION 10

Availability Heuristic is a decision making strategy that allows for:

A. Instances of events of greater frequency

B. Use of traits one may have to correspond with previously formed stereotypes

C. Use of emotional evaluations

D. Use of confirmation bias, anchoring, overconfidence, and hindsight bias

Explanation / Answer

We are required to do only 4 parts of the a question.

1. According to endowment effect, people assign a higher value to assets they own then the actual value just because they own it. Hence the correct option is c. Endowment Effect.

2. Satisfice refers to deciding on the best decision which is acceptable and reasonable. Hence the correct option is a. Satisfice.

3. Four general heuristics that we focus are: (1) the availability heuristic,

(2) the representativeness heuristic,

(3) Anchoring and adjustment,

(4) the affect heuristic.

Hence the given statement is FALSE.

5. Decision to making can be divided into two models:

Prescriptive

Descriptive.

Hence the correct option is c. Prescriptive

And Descriptive.

6. Judgement is refers to cognitive aspect of the decision making. Hence the given statement is TRUE.

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