Question 1

How do rewards affect intrinsic motivation?

Accepted Answer

The answer of How do rewards affect intrinsic motivation?...

Question 2

The _______ is the tendency for people to sell stocks that have risen too early and hold stocks that have declined for too long.

Accepted Answer

The disposition effect refers to the tendency of investors to sell assets that have increased in value too early while holding onto assets that have declined in value for too long. This behavior is driven by the desire to avoid regret and confirm one's investment decisions.

Question 3

Lamont has a 42-inch high definition television that he purchased for $1200 six months ago. He's decided to replace it with a larger 60-inch television, and tries to sell the smaller one for $1100. He finds that nobody will buy it, and tells prospective buyers, "it is almost brand new and I'm selling it for less than it cost when I bought it!" Lamont fails to recognize that the same televisions can now be purchased for $800, and he is inflating the value of his television just because he owns it. This is called the

Accepted Answer

The endowment effect describes a cognitive bias where people ascribe more value to things merely because they own them. Lamont's overvaluation of his television, despite its market price having decreased, is a classic example of this effect.

Question 4

Vince buys tickets to a concert for his girlfriend, Jennifer. Two weeks before the show, the couple split up. Vince decides to go to the concert anyway even though he doesn't really like the band. "I paid the money, so I might as well go," he says. Vince's decision demonstrates the ____ principle.

Accepted Answer

Vince's decision is based on the sunk cost fallacy, which occurs when people continue a behavior or endeavor as a result of previously invested resources (time, money, or effort), even if they no longer want to or the outcome is not beneficial.

Question 5

When a person applies for a job and is granted an interview, they are naturally motivated to present themselves as favorably as possible. How might this lead to intentional or even unintentional "faking"? What forms might this faking take?

Accepted Answer

The answer of When a person applies for a job...

Question 6

Which of the following demonstrates behavior of the second highest bidder in Teger's (1980) dollar auction?

Accepted Answer

Teger's (1980) dollar auction experiment illustrates the escalation of commitment, where participants continue to bid to avoid losing their previous investment, even when it becomes counterproductive. This is seen in the behavior of the second highest bidder, who keeps increasing their bid to try to win, despite the increasing costs.

Question 7

James has just purchased a stock for $50 a share, and in the first two days it rises to $60 a share. James decides that this 20% gain in 48 hours is a nice little windfall, and sells the stocks at that price. The fact that it next goes up to $80 a share in the following month leaves James wondering why he sold. This tendency to sell a stock too quickly after its value has increased is called the ____ effect.

Accepted Answer

The disposition effect refers to the tendency of investors to sell assets that have increased in value too early while holding onto assets that have decreased in value for too long.

Question 8

Ulrich bought an investment property that he intended to rent to tourists on the beach. After six months, he had had only one rental for far less than the cost he had hoped to charge. His wife encouraged him to sell the home, but he insisted that it will be profitable if they don't give up and keep trying to rent it. Ulrich's unwillingness to sell the home and cut his losses is an example of the ____ effect.

Accepted Answer

The answer of Ulrich bought an investment property that he...

Question 9

The economic rule of thumb that only future costs and benefits, not past commitments, should be considered in making a decision is the

Accepted Answer

The sunk cost principle advises that decisions should be based on future costs and benefits, ignoring costs already incurred (sunk costs) because they cannot be recovered.

Question 10

Compare and contrast the leadership qualities of men and women..

Accepted Answer

The answer of Compare and contrast the leadership qualities of...

Question 11

While violating the sunk cost principle, people often

Accepted Answer

The sunk cost fallacy occurs when individuals continue a behavior or endeavor as a result of previously invested resources (time, money, or effort), even if they would not continue the endeavor otherwise. Choice B accurately describes this behavior, as it involves continuing a failing course of action to justify prior decisions and investments, despite it not being the most rational choice moving forward.

Question 12

Briefly explain the equity theory.

Accepted Answer

The answer of Briefly explain the equity theory....

Question 13

Name two factors that affect both supervisor ratings of employees and employee self-ratings.

Accepted Answer

The answer of Name two factors that affect both supervisor...

Question 14

The _______ is the tendency for people to persist in failing investments to avert loss, which causes losses to mount.

Accepted Answer

The escalation effect describes the tendency for people to continue investing in a failing project to avoid losses, often leading to even greater losses.

Question 15

Less than 30 minutes into the 4-hour film, Sanford could tell he was going to hate the movie. He considered getting up and walking out but felt compelled to sit through the whole movie because he had already spent his money on the ticket. This illustrates

Accepted Answer

Sanford's decision to stay and watch the movie despite not enjoying it because he had already paid for the ticket is an example of the sunk cost principle. This principle suggests that individuals continue a behavior or endeavor as a result of previously invested resources (time, money, or effort), even if they are not enjoying or benefiting from it.

Question 16

Explain the basic premise of equity theory as it applies to the workplace. What are two steps that a person experiencing distress within this model might take to reduce their discomfort? Give an example of how this might play out in a real workplace situation.

Accepted Answer

The answer of Explain the basic premise of equity theory...

Question 17

One difficulty that homeowners often run into when they attempt to sell is that they tend to value their own property much higher than do other people, including real estate agents and potential buyers. This tendency is consistent with the

Accepted Answer

The endowment effect describes a psychological phenomenon where people ascribe more value to things merely because they own them. This explains why homeowners often value their property higher than others do.

Question 18

Describe two factors that can reduce the validity of the traditional interview.

Accepted Answer

The answer of Describe two factors that can reduce the...

Quiz 13: Business