Insanity is the legal term for a severe mental illness, present at the time a crime was committed, that impaired the defendant's capacity to understand the moral wrong of an act. Insanity is not a medical diagnosis.

Idiocy is any severe mental deficiency present in early childhood. Dementia is a progressive loss of mental function characterized by memory impairment. A psychosis is a mental disorder in which there is a severe loss of contact with reality; it is a common feature of schizophrenia. A neurosis is an unconscious conflict that produces anxiety and leads to the use of defense mechanisms. 

While this may seem like a very broad definition—perhaps classifying deviant behavior rather than a psychological abnormality—psychological abnormality is defined by this crucial element: the individual suffers due to a reocurring problem or disorder. That is, the individual suffers involuntarily at the hands of the disease and has little control of the symptomatic behavior of the illness. They often want to change their illness as opposed to continuing on how they are. 

Common social biases include gender, race, economic class, ethnicity, and many more. Many are not even conscious that they carry these prejudices, and the best we can hope for improvement is to become aware of and change these biases as a society. Current statistics suggest that African-American males are more likely to be diagnostics as psychotic than Caucasian males in instances of subject abuse. This is an example of stereotype and prejudice intersecting professional diagnosis in an increadibly detrimental and socially dangerous manner; even though the individuals may display the same symptoms, they are given different diagnoses.

One of the major practical concerns with giving a person an official diagnosis is that it may become hard for a person to escape the label of that diagnosis. For instance, if a person is diagnosed as schizophrenic, observers may already have a preconceived notion of that person and behave differently towards them. If the diagnosed person sees they are treated as different, this may reinforce negative behaviors and perpetuate the stigma. Even if the person diagnosed as schizophrenic shows positive progress, observers may still have trouble thinking of them as a healthy, stable person.

Because narcissists are so focused on themselves and their own needs, they often neglect the needs of others, sometimes even exploiting these others for their own gain.

Anhedonia is defined as the loss of the ability to experience pleasure. Since Joe is no longer enjoying his hobbies (which are, by definition, activities he likes and enjoys), and spending time with his friends (who are, by definition, people he likes), it is reasonable to assume that he is experiencing some degree of anhedonia.

The DSM (Diagnostic and Statistical Manual of Mental Disorders) 5 is the latest, not only, edition of this guidebook for psychologists. The DSM helps psychologists diagnose their patients and does not offer explanations for the origins of disorders. Homosexuality used to be listed as a disorder in earlier editions of the DSM but is not included in the DSM 5. 

There are 5 axes used in the DSM for diagnosis: 

Axis 1- clinical disorders (developmental, learning, etc.)

Axis 2-personality disorders

Axis 3- physical disorders

Axis 4- psychosocial disorders

Axis 5- global assessment of functioning

Even if you didn't know these exact axes, it is important to remember that "insanity" is not a clinical term ever used in the DSM or by therapists. 

When someone is diagnosed as having a particular disorder, there is sometimes stigma (shame or disgrace) associated with this labeling, which is the opposite of the answer choice "social acceptance."

As for the other answer choices, comorbidity is the concurrence of multiple psychological disorders in one person. The placebo effect occurs when someone believes that they are being treated for something (when they are really not) and subsequently improves as a function of that belief. The diathesis-stress model explains the interaction of genetic and environmental factors in terms of disorders-- the diathesis is the predisposition to a disorder that is triggered by some sort of stress.

Race, gender, SES, and family history all play roles in the development (or non-development) of a disorder. For example, women are more likely to develop most psychological disorders, especially mood and anxiety disorders, but men are more likely to develop substance abuse disorders. Race can also impact vulnerability for certain disorders and low SES is associated with higher rates of many disorders, such as anxiety disorders. Family history is perhaps the most significant risk factor because genetics play a large role in whether someone is likely to develop a specific disorder. 

If there is any connection between family size and psychopathology, it has not been researched or documented and is therefore has not been directly indicated as a strong risk factor.