<u>Lucy wants to learn more about how people think. </u>
Explanation:
Note, generally speaking, the term "psychology" refers to the study of how people or living things think, and the way they behave.
Hence, a good example of the word psychology is best expressed in the sentence, <em>"Lucy wants to learn more about how people think".</em><u> In other words, she wants to learn more about the psychology of people.</u>
The answer is, or should be, B. An 'adjective phrase' (or adjectival phrase) is a phrasewhose head word is an adjective, e.g. fond of steak, very happy, quite upset about it, etc.