Why is a nudge useful for choices where benefits and costs are separated by time?

How can a nudge be defin Show more In the Book ECON 121 Santa Ana College Volume 2. Answer the question: 1> How can a nudge be defined as libertarian? a. Nudges are not libertarian no matter how you look at them. b. People remain free to make whichever choice they prefer. The incentives remain the same but the context of the question is changed. c. Government is ensuring that people make full use of their civil liberties by encouraging them to make choices that are good for them. Government is not forcing people to make any particular choice. d. Nudges are examples of government intervention which has historically been a liberal agenda. 2> In what way is nudge policy paternalistic? a. Most policy makers are men making nudge policy paternalistic. b. People are given rights to make their own decisions which are the decisions that are most likely best for them. c. Choices are framed in ways that people choose what is best for them as decided by policy makers. d. People are granted the right to make decisions by policy makers. These rights make nudges paternalistic. 3> Two people are given the choice to participate in a retirement program in which the firm matches contributions. Person A is given a form in which she must check a box to opt into the retirement program. Person B is given a form in which she must check a box to opt out of the retirement program. According to studies which person is more likely to participate? Or are they equally likely to participate? Explain your answer. a. Person B is more likely to participate because studies have shown that people are more likely to choose the default option. b. Person B is more likely to participate because studies have shown that people react negatively to nudges. c. Person A is more likely to participate because studies have shown that people are less likely to choose the default option. d. cannot be predicted who is more likely to participate because studies have shown that people are suspicious of employer-sponsored retirement programs causing them to review their options more closely. 4> Why is a nudge useful for choices where benefits and costs are separated by time? a. People tend to place more weight on future costs and benefits because they look forward to them. This may result in choices that place too much emphasis on future benefits. Nudges allow a better understanding of the risks associated with future consumption. b. When costs and benefits are separated by time they are particularly difficult to measure because the units of measurement change. Nudges will work to provide a common unit for comparison. c. The framework of current choices will be different than the framework of future choices. This makes comparing the costs and benefits difficult. A nudge provides a common framework for easier comparison. d. People tend to place more weight on costs and benefits that are immediate compared to costs and benefits that occur in the future. This may result in choices that upon reflection are viewed as suboptimal. Nudges present choices in a way that make future costs and benefits more comparable with immediate costs and benefits so this tendency will be offset. 5> What distinguishes a nudge from a push? a. In push policies the government provides many options for firms and individuals to comply with a particular policy; in nudge policies government restricts free choice by someone or some institutions in society. b. In push policies the government makes the decisions; in nudge policies government requires firms to present choices in a particular way. c. In push policies the government manipulates money prices; in nudge policies government manipulates shadow prices. d. In push policies the government requires firms to take a particular action; in nudge policies government leaves everyone free to choose. 6> How is conspicuous consumption an example of the importance of relative materialism to ones happiness? a. Conspicuous consumption is consuming a product in public. Because of the social stigma of overt consumption conspicuous consumption is viewed as asserting ones relative materialism. b. Conspicuous consumption is buying a good for the purpose of showing it off. Although one might get pleasure from the good itself much of the pleasure comes from showing others that you have relatively more. c. Conspicuous consumption is using ones abilities to acquire relatively more material goods. One feels relatively more important by sharing ones materialism conspicuously. d. Conspicuous consumption is the overconsumption of some product as a means of self-punishment. One is trying to atone for the fact that he has relatively more material things than others. Show less

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