A Level Economics AQA Practice Exam

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What term describes the influence on decisions created by the presentation of choices?

Framing
Nudges
Choice Architecture
Heuristics

The correct answer is: Choice Architecture

The term that describes the influence on decisions created by the presentation of choices is known as choice architecture. This concept refers to the way in which options are structured and presented to individuals, which can significantly impact their decision-making process. The arrangement of choices, the wording used, and the emphasis placed on certain options can lead individuals to make different decisions, even if the underlying choices remain the same. In understanding this term, it's important to note that choice architecture encompasses various techniques and strategies used to guide people's decisions. For example, organizing options in a particular order, highlighting certain features, or even using defaults can help shape preferences and behaviors. This concept is widely used in behavioral economics to design environments that promote better decision-making and improve outcomes in areas like public health, finance, and consumer behavior. Other concepts like framing, nudges, and heuristics relate to decision-making but focus on different aspects. Framing refers specifically to how information is presented and can shape perceptions. Nudges are subtle changes in the environment that encourage certain behaviors while still allowing freedom of choice. Heuristics are mental shortcuts that simplify decision-making but do not necessarily involve the structured presentation of choices that defines choice architecture.