Refined Economics Irrational Behavior Test - 87+ MCQs: Economics - Irrational Behavior Quiz: Explore the Unpredictable Aspects of Economic Decision-Making

1. What is the 'Broken Window Fallacy' in economic reasoning?

Belief that destruction stimulates economic growth

Theory that broken windows create job opportunities

Idea that visible economic activity is always beneficial

Misinterpretation of supply and demand dynamics

2. How does 'Gini Coefficient' measure economic inequality?

It measures total income in an economy

It quantifies the gap between rich and poor

It evaluates government intervention in the economy

It assesses the overall economic growth

3. What is 'Prospect Theory' and how does it differ from expected utility theory?

A theory predicting future market trends

A theory focusing on maximizing utility

A theory describing decision-making under uncertainty

A theory studying optimal resource allocation

4. What is the 'Laffer Curve' used to illustrate in economic theory?

Tax revenue as tax rates increase

Government spending patterns

Inflationary trends

Labor force participation rates

5. How does the 'Dunning-Kruger Effect' impact economic decisions, and what role does it play in irrational behavior?

Preferring inefficient outcomes

Having no impact on decision-making

Overestimating one's own abilities

Encouraging equitable distribution of resources

6. What economic term describes the maximum amount a consumer is willing to pay for a good or service?

Consumer surplus

Producer surplus

Market equilibrium

Deadweight loss

7. How does 'Cognitive Dissonance' manifest in decision-making?

Objective evaluation of conflicting information

Avoidance of conflicting beliefs

Balancing opposing viewpoints

Uncomfortable feeling when holding conflicting beliefs

8. What is the 'Tulip Mania' in economic history?

Rapid industrialization in the tulip industry

Boom and bust in the tulip market during the Dutch Golden Age

Introduction of tulip cultivation techniques

Long-lasting stability in tulip prices

9. What characterizes a 'Mixed Economy'?

Government ownership of all means of production

Private ownership of all means of production

Limited government intervention in economic affairs

Centralized economic planning

10. What role does the 'Ultimatum Game' play in understanding irrational behavior?

A game theory experiment to study bargaining and fairness

A stock market simulation

A model for efficient market hypothesis

A measure of inflation rates