PrepTest 113, Section 1, Question 26

Working the answers

• A

  The author doesn't criticize researchers for trusting subjects' stated preferences. Whether people actually do what they say they would do is a separate issue that isn't examined here.

• B

  Notice that this hypothesis already includes the exception: gambling to escape an otherwise certain loss. The examples support ordinary risk aversion and then describe that exception. We can't use the exception to reject a claim that expressly allows for it.

• C
  Correct

  Just before the Britain–Argentina example, we're told nations seeking to recover losses can take risks that greatly exceed the losses’ objectively assessed worth (paragraph 3). The conflict illustrates that point, supporting a reasonable argument that Britain's risk exceeded the measurable benefit. We don't need a numerical valuation of the islands or an assumption that Britain misunderstood Argentina. Both countries saw themselves as recovering lost territory.

• D

  Subjective doesn't mean impossible to understand. The ending specifically urges each side to understand the other's perspective. D contradicts the purpose of studying those perceptions.

• E

  The recent studies do examine gambling to avoid a sure loss. We aren't given this additional claim that moderate risks in such situations often arise from markedly different reasoning.