Question 1

Many people do not invest in 401K plans or other retirement plans-even though they are not broke, and could afford to put money aside. One explanation for this is the fact that people tend to engage in ____ when making decisions about how to manage their money.
A) reactance
B) the Zeigarnik effect
C) risk aversion
D) temporal discounting

Accepted Answer

D

Question 2

What is temporal discounting?
A) The tendency for people to forget about the time that will be required to achieve things when setting goals
B) The tendency for people to place greater weight on the present over the future in decision-making
C) The tendency for plans to be overly optimistic because the planner does not make allowances for unexpected events
D) The tendency for people to ignore past or historical events when making decisions

Accepted Answer

Temporal discounting refers to the tendency for people to place greater weight on the present over the future in decision-making. This means that people may choose a smaller immediate reward over a larger reward that they would receive in the future. This can lead to impulsive decision-making and can have negative consequences in the long-term.

Question 3

Even though she is not in desperate need of boots, Ellen says that she would rather buy a pair of boots today (for $200) rather than wait two weeks, when they will be on sale for half the price. Ellen's decision most likely involves ____.
A) temporal discounting
B) risk aversion
C) the status quo bias
D) the omission bias

Accepted Answer

Ellen's decision involves temporal discounting, which is the tendency to prioritize immediate rewards over future ones, despite the potential cost savings. She is willing to pay $200 now instead of waiting for the sale and paying $100 because she values the immediate satisfaction of having the boots more than the money she would save by waiting.

Question 4

As discussed in the text, when purchasing a car, people end up paying a bit more attention than intended to choices such as color and engine size, and a bit less attention than intended on information such as the chances of fatalities should there be an accident with the car. This pattern can be taken as evidence for ____.
A) the status quo bias
B) the certainty effect
C) risk aversion
D) the Zeigarnik effect

Accepted Answer

The answer of As discussed in the text, when purchasing...

Question 5

Joe has a big Spanish exam coming up next week. Will it help him if he visualizes himself acing the exam? What about if he visualizes himself studying really hard for the exam?
A) Neither of these things will help him.
B) Both of these things will help him about equally.
C) Both of these things will help him-but visualizing himself acing the exam (the true end goal) will help more than visualizing himself studying really hard.
D) Both of these things will help him-but visualizing himself studying really hard (which will likely lead to him actually studying harder) will help more than visualizing himself acing the exam.

Accepted Answer

The answer of Joe has a big Spanish exam coming...

Question 6

The tendency to give more weight to possible losses than to possible gains when making decisions that require trade-offs is known as ____.
A) the certainty effect
B) temporal discounting
C) risk aversion
D) the status quo bias

Accepted Answer

This tendency is known as risk aversion, where people tend to avoid taking risks or making decisions that have the potential for loss. This can result in favoring options with less risk even if they offer lower potential gains. The other options (A, B, and D) refer to different biases or factors that can affect decision-making, but they are not specifically related to the tendency to give more weight to possible losses than to possible gains.

Question 7

When you are deciding between two apartments, assuming you can afford both of them and they are both adequate for your needs, what feature should you pay most attention to if you want to maximize your satisfaction with the apartment a year after you have moved in?
A) Rent-choose the cheapest apartment.
B) Neighborhood quality-choose the most pleasant neighborhood.
C) Square footage-choose the biggest apartment.
D) Both rent and square footage should affect your decision equally, and more so than neighborhood quality.

Accepted Answer

While rent and square footage are important considerations, research shows that neighborhood quality has the greatest impact on long-term satisfaction with an apartment. A pleasant neighborhood can enhance the overall experience of living in an apartment, while a negative neighborhood can diminish it. Therefore, it is best to prioritize neighborhood quality when deciding between two apartments.

Question 8

When people are making choices between two options that differ both qualitatively and quantitatively, they tend to focus on ____.
A) quantitative differences primarily
B) qualitative differences primarily
C) both quantitative and qualitative differences
D) what their friends will think

Accepted Answer

The answer of When people are making choices between two...

Question 9

Most research focuses on the ____ step of decision-making, which involves ____.
A) first; whittling the full range of choices down to a limited few
B) first; carefully considering a few top options.
C) second; whittling the full range of choices down to a limited few
D) second; carefully considering a few top options

Accepted Answer

The answer of Most research focuses on the ____ step...

Question 10

When participants in Bazerman et al.'s (1992) study compared two options for resolving a dispute with a neighbor, what did they generally prefer?
A) The option that gave them $600 and the neighbor $800
B) The option that gave them $800 and the neighbor $600
C) The option that gave the neighbor and themselves $500 each
D) They were indifferent as to which option was best.

Accepted Answer

The answer of When participants in Bazerman et al.'s (1992)...

Question 11

William James, the father of American psychology, once wrote: "Thinking is for doing." What did he mean by this?
A) The human brain probably developed its current cognitive abilities in large part to enable effective decision-making and to facilitate behavior.
B) People typically engage in conscious thought only when engaged in a task (e.g., only when solving a puzzle, trying to construct an argument, or making a decision about something).
C) Every behavior that a person engages in implies a particular thought or set of thoughts; researchers can therefore infer thoughts from behaviors.
D) Because the primary role of thoughts is simply to plan behaviors, the proper focus of study for psychologists is behaviors themselves (and not thoughts).

Accepted Answer

William James believed that the purpose of thinking was to facilitate action, suggesting that cognitive processes evolved to help individuals with decision-making and behavior.

Question 12

Research suggests that when athletes who are preparing for a big game visualize themselves training really hard for the game, they ____; when they visualize themselves actually winning the game, they ____.
A) tend to actually train less than usual and thus perform worse; in fact perform better.
B) tend to actually train less than usual and thus perform worse; also actually tend to perform worse.
C) tend to train harder than usual and thus perform better; in fact tend to perform worse.
D) tend to train harder than usual and thus perform better; also tend to perform a little better.

Accepted Answer

Research suggests that visualizing oneself training hard leads to an increase in motivation and effort put into training, resulting in better performance. On the other hand, visualizing oneself winning the game may create a sense of complacency and reduce the motivation to put in the necessary effort, leading to a slight decrease in performance. Therefore, athletes who visualize both training hard and winning the game tend to perform better overall.

Question 13

Research on decision-making indicates that there are two main steps in making choices. They are ____.
A) ruling out the "losers" in the full range of choices and then focusing in on selecting a "winning" option.
B) whittling the full range of choices down to a limited few and then carefully considering these remaining few options.
C) making a preliminary choice, and then reviewing your choice to be certain that you are satisfied with it.
D) establishing your priorities, and then identifying the choice that best complements your priorities.

Accepted Answer

According to the statement, the two main steps in making choices are "whittling the full range of choices down to a limited few and then carefully considering these remaining few options." Therefore, option B is the correct answer. Options A, C, and D are not consistent with the statement given.

Question 14

People tend to say that they would prefer to have $1000 today rather than $1200 two weeks from now-even though, logically, they would be better off with the $1200 in two weeks. The phenomena underlying this tendency is known as ____.
A) risk aversion
B) the certainty effect
C) temporal discounting
D) the status quo bias

Accepted Answer

The phenomena described is known as temporal discounting, which refers to the tendency to place greater value on immediate rewards compared to rewards received in the future. This can result in people choosing a smaller immediate reward over a larger delayed reward, even if it is not logically the best choice.

Question 15

Research shows that when making decisions, MOST people are more interested in ____ as opposed to ____.
A) avoiding losses; pursuing gains
B) pursuing gains; avoiding losses
C) taking a gamble; "sure things"
D) "sure things"; taking a gamble

Accepted Answer

The concept of loss aversion suggests that people are more motivated to avoid losses than they are to seek gains. Therefore, when making decisions, most people are more interested in avoiding losses (A) rather than pursuing gains (B), taking a gamble (C), or choosing "sure things" (D).

Question 16

MOST people show a tendency ____ when making decisions that require tradeoffs.
A) to give more weight to possible losses than to possible gains
B) to give more weight to possible gains than to possible losses
C) to give more weight to possible losses than to certain gains
D) to give more weight to probable outcomes rather than certain outcomes

Accepted Answer

This tendency is known as loss aversion, and research has shown that it is a common trait among decision-makers. People are generally more willing to take risks to avoid losses than they are to pursue potential gains, even when the two options have the same expected outcome. This is thought to be an evolutionary adaptation that helped our ancestors survive in an uncertain environment where avoiding threats was more important than maximizing rewards.

Question 17

The tendency for people to place greater weight on the present over the future in decision-making is known as ____.
A) the certainty effect
B) temporal discounting
C) reactance
D) the now-or-never effect

Accepted Answer

Temporal discounting refers to the idea that we often prioritize immediate rewards or costs over those that may come in the future. This is a common bias seen in decision-making and can have long-term consequences. The other options listed (certainty effect, reactance, now-or-never effect) are related to cognitive biases but do not specifically refer to the tendency to prioritize the present over the future in decision-making.

Question 18

The so-called "certainty effect" in decision-making refers to tendency for people to give greater weight to ____ than to ____.
A) definite outcomes; probabilities
B) possible positive outcomes; possible negative outcomes
C) immediate (soon-to-happen) outcomes; future (far off) outcomes
D) common outcomes; rare outcomes

Accepted Answer

The certainty effect refers to the bias in decision-making where people are more likely to give greater weight to definite outcomes (i.e. certain outcomes) than to probabilities. This means that individuals may overlook or undervalue rare but possible outcomes in favor of guaranteed outcomes.

Question 19

When participant's in Bazerman et al.'s (1992) study predicted their reaction to only one of two options presented to them for resolving a financial dispute with a neighbor, which option was generally preferred across participants?
A) The option that paid them $600 and their neighbor $800
B) The option that paid them $800 and their neighbor $600
C) The option that paid both their neighbor and themselves $500
D) They were indifferent as to which option was best.

Accepted Answer

The option that paid both their neighbor and themselves $500 was generally preferred across participants because it was the most equitable option.

Question 20

Mark is comparing two jobs. One pays $70,000 per year, but will be very stressful. The other pays $60,000, but will be less stressful. According to research presented in your text on Money Matters, Mark will ____.
A) prefer the $70,000 job
B) prefer the $60,000 job
C) decide to take the 70,000 job but the $60,000 job would probably make him happier
D) decide to take the $60,000 job but the $70,000 job would probably make him happier

Accepted Answer

Research suggests that while higher-paying jobs might seem more attractive, less stressful jobs often lead to greater happiness and satisfaction in the long run.

Quiz 4: Choices and Actions: The Self in Control

Many people do not invest in 401K plans or other retirement plans-even though they are not broke, and could afford to put money aside. One explanation for this is the fact that people tend to engage in ____ when making decisions about how to manage their money.

What is temporal discounting?

Even though she is not in desperate need of boots, Ellen says that she would rather buy a pair of boots today (for $200) rather than wait two weeks, when they will be on sale for half the price. Ellen's decision most likely involves ____.

Joe has a big Spanish exam coming up next week. Will it help him if he visualizes himself acing the exam? What about if he visualizes himself studying really hard for the exam?

The tendency to give more weight to possible losses than to possible gains when making decisions that require trade-offs is known as ____.

When you are deciding between two apartments, assuming you can afford both of them and they are both adequate for your needs, what feature should you pay most attention to if you want to maximize your satisfaction with the apartment a year after you have moved in?

When people are making choices between two options that differ both qualitatively and quantitatively, they tend to focus on ____.

Most research focuses on the step of decision-making, which involves .

When participants in Bazerman et al.'s (1992) study compared two options for resolving a dispute with a neighbor, what did they generally prefer?

William James, the father of American psychology, once wrote: "Thinking is for doing." What did he mean by this?

Research suggests that when athletes who are preparing for a big game visualize themselves training really hard for the game, they ; when they visualize themselves actually winning the game, they .

Research on decision-making indicates that there are two main steps in making choices. They are ____.

People tend to say that they would prefer to have $1000 today rather than $1200 two weeks from now-even though, logically, they would be better off with the $1200 in two weeks. The phenomena underlying this tendency is known as ____.

Research shows that when making decisions, MOST people are more interested in as opposed to .

MOST people show a tendency ____ when making decisions that require tradeoffs.

The tendency for people to place greater weight on the present over the future in decision-making is known as ____.

The so-called "certainty effect" in decision-making refers to tendency for people to give greater weight to than to .

When participant's in Bazerman et al.'s (1992) study predicted their reaction to only one of two options presented to them for resolving a financial dispute with a neighbor, which option was generally preferred across participants?

Mark is comparing two jobs. One pays $70,000 per year, but will be very stressful. The other pays $60,000, but will be less stressful. According to research presented in your text on Money Matters, Mark will ____.