Behavioural Economics and Decision Making: Reading Answers & Explanations
IELTS Reading practice test · 13 questionsAcademicmedium
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About this passage
The passage opens: “For a long time, the study of economics rested on a convenient assumption about human behaviour. People were treated as rational decision-makers who carefully weighed the costs and benefits of every choice and acted so as to maximise their own advantage.”
- Passage length: about 722 words
- Questions: 13
- Question types: Yes / No / Not Given, Multiple Choice, Short Answer
“Behavioural Economics and Decision Making” is an original IELTS-style practice passage written by IELTS-Bank. It is not taken from an official IELTS or Cambridge test, so these answers only apply to our version.
Answer key at a glance
Behavioural Economics and Decision Making answers with explanations
Questions 1–5: Yes / No / Not Given
Do the following statements agree with the claims of the writer in the passage? Write YES, NO or NOT GIVEN.
- 1
Traditional economics assumed that people always make rational, self-interested choices.
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Answer: YES
Why: The writer's view here agrees with the statement, so the answer is YES.
Evidence · Paragraph 1 “People were treated as rational decision-makers who carefully weighed the costs and benefits of every choice and acted so as to maximise their own advantage.”
- 2
The ways in which people depart from rationality are completely random and unpredictable.
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Answer: NO
Why: The writer's view here contradicts the statement, so the answer is NO.
Evidence · Paragraph 2 “…these departures from rationality are not random errors but follow regular patterns, which means they can be studied systematically.”
- 3
Most people feel the pain of a loss more strongly than the pleasure of an equivalent gain.
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Answer: YES
Why: The writer's view here agrees with the statement, so the answer is YES.
Evidence · Paragraph 3 “…most people feel the pain of a loss more strongly than the pleasure of an equivalent gain.”
- 4
Behavioural economics is now taught in most of the world's universities.
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Answer: NOT GIVEN
Why: The statement claims that behavioural economics is taught in most universities worldwide, but the passage neither confirms nor denies this, focusing instead on the principles and findings of behavioural economics.
- 5
The way a choice is presented can affect the decision people make.
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Answer: YES
Why: The writer's view here agrees with the statement, so the answer is YES.
Evidence · Paragraph 4 “…the way a choice is presented, rather than its actual content, can strongly influence the decision people make.”
Question 6: Multiple Choice
Choose the correct letter, A, B, C or D.
- A. why people enjoy taking large risks
- B. why people cling to what they have and avoid risks that might leave them worse off
- C. why people ignore the value of money
- D. why people always act rationally
- 6
What does loss aversion help to explain?
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Answer: B — why people cling to what they have and avoid risks that might leave them worse off
Why: This is the part of the passage that supports B — why people cling to what they have and avoid risks that might leave them worse off.
Evidence · Paragraph 3 “This tendency, known as loss aversion, helps to explain why people often cling to things they already have and are reluctant to take risks that might leave them worse off.”
Question 7: Multiple Choice
Choose the correct letter, A, B, C or D.
- A. loss aversion
- B. reference points
- C. framing
- D. choice architecture
- 7
The example of a medical treatment is used to illustrate the effect of what?
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Answer: C — framing
Why: This is the part of the passage that supports C — framing.
Evidence · Paragraph 4 “…a medical treatment described as giving a ninety per cent chance of survival is likely to be viewed more favourably than the same treatment described as carrying a ten per cent chance of death... This sensitivity to framing.”
Question 8: Multiple Choice
Choose the correct letter, A, B, C or D.
- A. because people judge value relative to reference points
- B. because expensive options are always better
- C. because people ignore prices completely
- D. because framing has no effect on price
- 8
Why can the presence of an expensive option make a moderately priced one appear more attractive?
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Answer: A — because people judge value relative to reference points
Why: This is the part of the passage that supports A — because people judge value relative to reference points.
Evidence · Paragraph 5 “…which is why the presence of an expensive option can make a moderately priced one appear more attractive. Such effects reveal that judgements of value are relative.”
Question 9: Multiple Choice
Choose the correct letter, A, B, C or D.
- A. that it removes people's freedom to choose
- B. that it is too expensive to use
- C. that it risks manipulating people and undermining their autonomy
- D. that it never changes people's behaviour
- 9
What concern do critics raise about nudging?
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Answer: C — that it risks manipulating people and undermining their autonomy
Why: This is the part of the passage that supports C — that it risks manipulating people and undermining their autonomy.
Evidence · Paragraph 7 “Critics worry that deliberately exploiting people's biases, even for good ends, risks manipulating them and undermining their autonomy.”
Questions 10–13: Short Answer
Answer the questions below. Choose NO MORE THAN THREE WORDS from the passage for each answer.
- 10
What is the tendency to feel losses more strongly than equivalent gains called?(max 2 words)
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Answer: loss aversion
Why: The answer “loss aversion” is taken from this sentence — copy the word(s) exactly as they appear. It fits the 2-word limit.
Evidence · Paragraph 3 “This tendency, known as loss aversion, helps to explain why people often cling to things they already have.”
- 11
What standard do people use when judging value in relative rather than absolute terms?(max 3 words)
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Answer: reference points (also accepted: reference point / a reference point)
Why: The answer “reference points” is taken from this sentence — copy the word(s) exactly as they appear. It fits the 3-word limit.
Evidence · Paragraph 5 “…they compare it with some standard, such as a previous price or a neighbouring alternative... People also rely heavily on reference points when judging value.”
- 12
What term describes a person or organisation that decides how options are presented?(max 3 words)
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Answer: a choice architect (also accepted: choice architect)
Why: The answer “a choice architect” is taken from this sentence — copy the word(s) exactly as they appear. It fits the 3-word limit.
Evidence · Paragraph 6 “The person or organisation that decides how options are presented, sometimes called a choice architect, can guide behaviour in particular directions.”
- 13
What is the use of techniques to steer behaviour without restricting freedom often called?(max 2 words)
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Answer: nudging
Why: The answer “nudging” is taken from this sentence — copy the word(s) exactly as they appear. It fits the 2-word limit.
Evidence · Paragraph 7 “The use of such techniques to steer behaviour, often described as nudging, has attracted both interest and criticism.”
Estimated band score for this test
Your raw score out of 13 scaled to the 40-question IELTS Reading (Academic) conversion table. This is the same estimate the practice page shows after you submit. A single passage is a small sample, so treat it as a guide.
| Correct answers | Estimated band |
|---|---|
| 13 / 13 | 9.0 |
| 12 / 13 | 8.5 |
| 11 / 13 | 7.5 |
| 10 / 13 | 7.0 |
| 9 / 13 | 6.5 |
| 8 / 13 | 6.0 |
| 7 / 13 | 5.5 |
| 5–6 / 13 | 5.0 |
| 4 / 13 | 4.0 |
| 3 / 13 | 3.5 |
| 2 / 13 | 3.0 |
| 1 / 13 | 2.0 |
| 0 / 13 | 0.0 |
Full-test score? Use the IELTS band calculator.
Tips for the question types in this test
Yes / No / Not Given
- Identify the claim in the statement and, crucially, whose opinion it represents — these passages often quote several people, so track who is speaking.
- Scan the passage for opinion signals: verbs like "argues", "believes", "suggests", "claims", and phrases such as "in the author’s view".
Common trap: Treating a reported opinion (someone else’s view mentioned by the writer) as the writer’s own conclusion.
Full Yes / No / Not Given strategyMultiple Choice
- Read the question stem carefully before the options so you know exactly what is being asked.
- Because multiple-choice questions follow passage order, locate the relevant section and read it in full — the answer usually depends on more than one sentence.
Common trap: Distractors that use exact words from the passage but distort the meaning.
Full Multiple Choice strategyShort Answer
- Read the instructions and note the exact word limit; going over it means zero marks even if the meaning is right.
- Turn each question into a set of keywords and predict what kind of answer it needs (a person, a date, a place, a noun).
Common trap: Exceeding the word limit (writing four words when only three are allowed).
Full Short Answer strategyPractise “Behavioural Economics and Decision Making” under exam conditions
Free, auto-marked, with the 20-minute timer and an instant band estimate.
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