6. Imagine two scenarios:Scenario 1: You see a rare sports card being sold for 500 in a store but choose not to buy it because you think it's too expensive. Scenario 2: You find a rare sports card worth 500 in your parents' attic. Rather than sell it, you choose to put it in a case and display it in your room. In scenario 1, you are putting more value on your 500 than the card. In scenario 2, you are putting more value on your card than the 500 This is an example of what? The Fear of Missing Out (FOMO) Overconfidence Endowment effect Confirmation bias 7. Michael observed he felt the pain of losing a 20 the joy of finding it on the sidewalk the week before. This is a result of __ Endowment effect Loss aversion Sunk cost Overconfidence 2 poi bill more than he felt 2 points

Question

6. Imagine two scenarios:Scenario 1: You see a rare sports card being sold for 500 in a store but choose not to buy it because you think it's too expensive. Scenario 2: You find a rare sports card worth 500 in your parents' attic. Rather than sell it, you choose to put it in a case and display it in your room. In scenario 1, you are putting more value on your 500 than the card. In scenario 2, you are putting more value on your card than the 500 This is an example of what? The Fear of Missing Out (FOMO) Overconfidence Endowment effect Confirmation bias 7. Michael observed he felt the pain of losing a 20 the joy of finding it on the sidewalk the week before. This is a result of __ Endowment effect Loss aversion Sunk cost Overconfidence 2 poi bill more than he felt 2 points

Answer 1

C. Endowment effectQuestion 7:Michael observed he felt the pain of losing a $20 bill more than he felt the joy of finding it on the sidewalk the week before. This is a result of...A. Endowment effectB. Loss aversionC. Sunk costD. Overconfidence【Explanation】: This question pertains to the emotional impact of gains versus losses. Michael's experience of feeling more pain from losing money than joy from gaining the same amount is a classic example of 'Loss Aversion'. Loss aversion is a concept in behavioral economics that suggests people feel the pain of losing money more intensely than the pleasure of gaining the same amount of money. It is not related to the endowment effect, which is about how ownership increases the value of an item. It is also not a sunk cost, which refers to a cost that has already been incurred and cannot be recovered, nor is it overconfidence, which is a bias where someone's subjective confidence in their judgments is greater than their objective accuracy.【Answer】: B. Loss aversion

Answer 2

The scenarios described here illustrate a cognitive bias where the ownership of an item increases its perceived value to the owner, beyond what would be considered its market value. In the first scenario, the individual perceives the

500 they could earn from selling it, simply because they own it. This change in perceived value due to ownership is known as the 'Endowment Effect'. It is a phenomenon where people ascribe more value to things merely because they own them. This effect is not related to FOMO, overconfidence, or confirmation bias, which have different definitions in psychological and economic contexts.