Megan, Who Is Eight Years Old, Has a Test Tomorrow

question 1

Multiple Choice

Megan, who is eight years old, has a test tomorrow. "It's an easy test," she tells her mother. "I just have to recognize a bunch of stuff on a chart. I finished studying for it yesterday. I know that I'll remember everything I need to know." Megan is exhibiting her

• A) brainstorming ability.
• B) creative thinking.
• C) metamemory.
• D) metadata.

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Definitions:

Behavioral Economists

Economists who study how psychological, social, cognitive, and emotional factors affect the economic decisions of individuals and institutions.

Inconsistent Anchoring

A cognitive bias where individuals rely too heavily on an initial piece of information (anchor) to make subsequent judgments but inconsistently adjust away from that anchor.

Prospect Theory

A behavioral economic theory that describes the way people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are known.

Matching Contribution

A contribution to a retirement plan, for instance, where an employer matches the employee's contribution up to a certain percentage.