1.
Why do credit card companies typically require small minimum
payment amounts on their customers’ monthly credit card statements.
a. Credit card companies are concerned that their customers
will be put in financial distress if required to make higher
payments.
b. Credit card companies want to promote faster repayment, and
customers will be encouraged to pay more each month if they’re able
to pay well beyond the minimum.
c. Credit card companies want to increase profits by promoting
slower repayment, and actual customer repayments will be anchored
by the smaller payment options
d. Credit card companies actually charge the highest minimum
payment they are allowed by law to charge.
2. Josh will receive a salary of $300,000 next year. According
to prospect theory:
a. Josh will be happy with that amount regardless of what he
has made in the past.
b. Josh will only be happy with that salary if everyone else
around him makes less than he does.
c. Josh will only be happy with that salary if his cost if
living has not yet increased.
d. Josh’s satisfaction with that salary depends on how much he
made in the past.
3. According to behavioral economists, the human brain
frequently employs heuristics because:
a. people have conciously trained their brains to do so.
b. these shortcuts minimize errors in decision making.
c. they produce more optimal outcomes than do rational
calculations of benefit and costs.
d. they save energy ans time in decision making.
4. Which of the following supermartket strategies to increase
sales would be the most consistent with a behavioral econonmics(
versus neoclassical economics) approach?
a. Distributing online coupons.
b. Providing discounts for buying in bulk
c. Positioning frequently purchased items at the back of the
store.
d. Offering price matching with other stores