1. A model of human decision making that attempts to “tell it like it is,” rathe

Question

1. A model of human decision making that attempts to “tell it like it is,” rather her than describing what is optimal is known as? a. Normative b. Descriptive model c. Prescriptive model
2. Why is utility not proportional to monetary value? a. Large sums of money are discounted b. People are more sensitive to losses than gains c. We get some value from “feeling good” about gain d. All of the above
3. What is the expected value of the following gamble? Using standard 6-sided dice, if you can predict the next roll of the dice (1-6) I pay you $8. But if you fail, you lose a $1. a. -.33 b. 0 c. .33 d. .5
4. Which of the following demonstrates a violation of a normative model of decision making ? a. Loss aversion b. Framing effect c. Sunk cost effect d. All of the above 1. A model of human decision making that attempts to “tell it like it is,” rather her than describing what is optimal is known as? a. Normative b. Descriptive model c. Prescriptive model
2. Why is utility not proportional to monetary value? a. Large sums of money are discounted b. People are more sensitive to losses than gains c. We get some value from “feeling good” about gain d. All of the above
3. What is the expected value of the following gamble? Using standard 6-sided dice, if you can predict the next roll of the dice (1-6) I pay you $8. But if you fail, you lose a $1. a. -.33 b. 0 c. .33 d. .5
4. Which of the following demonstrates a violation of a normative model of decision making ? a. Loss aversion b. Framing effect c. Sunk cost effect d. All of the above a. Normative b. Descriptive model c. Prescriptive model
2. Why is utility not proportional to monetary value? a. Large sums of money are discounted b. People are more sensitive to losses than gains c. We get some value from “feeling good” about gain d. All of the above
3. What is the expected value of the following gamble? Using standard 6-sided dice, if you can predict the next roll of the dice (1-6) I pay you $8. But if you fail, you lose a $1. a. -.33 b. 0 c. .33 d. .5
4. Which of the following demonstrates a violation of a normative model of decision making ? a. Loss aversion b. Framing effect c. Sunk cost effect d. All of the above

Explanation / Answer

1. b. Descriptive model

2. c. We get some value from “feeling good” about gain

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