Question 1

What does it mean to say that some modern economists are doing the work of "reverse engineers"?

Accepted Answer

Modern economists who focus on mechanism

Question 2

What is one concern that traditional economists have about behavioral economic policy?

Accepted Answer

Any one of the three following concerns

Question 3

Money prices are:

Accepted Answer

A) essential to a coordinating mechanism. 
B) not essential to a coordinating mechanism. 
C) always the best way to solve economic problems. 
D) unfair ways of coordinating individual actions. 
A) essential to a coordinating mechanism. 
B) not essential to a coordinating mechanism. 
C) always the best way to solve economic problems. 
D) unfair ways of coordinating individual actions.

Question 4

Economists who identify a goal and then design a mechanism to achieve that goal are engaging in:

Accepted Answer

A) setting money prices. 
B) laissez-faire policies. 
C) choice architecture. 
D) mechanism design. 
A) setting money prices. 
B) laissez-faire policies. 
C) choice architecture. 
D) mechanism design.

Question 5

When the American League instituted designated batters (that is, pitchers were exempt from batting), the shadow prices of throwing bean-balls (a pitch aimed at the batter's head):

Accepted Answer

A) rose. 
B) fell. 
C) did not change. 
D) disappeared. 
A) rose. 
B) fell. 
C) did not change. 
D) disappeared.

Question 6

Sending people letters about their energy usage along with energy-saving tips is:

Accepted Answer

A) an example of an information nudge. 
B) an example of an advantageous default option nudge. 
C) an example of a pricing nudge. 
D) not a nudge. 
A) an example of an information nudge. 
B) an example of an advantageous default option nudge. 
C) an example of a pricing nudge. 
D) not a nudge.

Question 7

Why is choice architecture important? What is it?

Accepted Answer

Choice architecture is the con

Question 8

In economics, the context in which decisions are presented is referred to as:

Accepted Answer

A) self-confirming equilibrium. 
B) enlightened self-interest. 
C) choice architecture. 
D) shadow prices. 
A) self-confirming equilibrium. 
B) enlightened self-interest. 
C) choice architecture. 
D) shadow prices.

Question 9

Which of the following is an example of a nudge?

Accepted Answer

A) Income is redistributed through tax and spending programs. 
B) A farmer's market raises prices because a storm destroyed crops. 
C) Government taxes cigarettes. 
D) An employee must check a box to opt out of a retirement savings program. 
A) Income is redistributed through tax and spending programs. 
B) A farmer's market raises prices because a storm destroyed crops. 
C) Government taxes cigarettes. 
D) An employee must check a box to opt out of a retirement savings program.

Question 10

What is a push policy and how is it related to a nudge policy? Does a push policy meet the criterion of libertarian paternalism? Why would a push policy be necessary? Give an example of a push policy.

Accepted Answer

A push policy is a government policy tha

Question 11

Focusing on how people actually behave is the main motivation behind ________ economics.

Accepted Answer

A) traditional 
B) behavioral 
C) modern 
D) home 
A) traditional 
B) behavioral 
C) modern 
D) home

Question 12

Nudges are meant to:

Accepted Answer

A) affect people's behavior while allowing them to retain free choice. 
B) limit the choices available in order to affect people's behavior. 
C) change the incentives of choices offered in order to alter behavior. 
D) control people's behavior on the basis of the goals of government. 
A) affect people's behavior while allowing them to retain free choice. 
B) limit the choices available in order to affect people's behavior. 
C) change the incentives of choices offered in order to alter behavior. 
D) control people's behavior on the basis of the goals of government.

Question 13

Which of the following do firms take advantage of to maintain high profits?

Accepted Answer

A) There is relatively little government oversight in the marketplace. 
B) People tend to gravitate toward the default option. 
C) People are unaffected by default options. 
D) The government only fines companies that have over $2 million in sales each year. 
A) There is relatively little government oversight in the marketplace. 
B) People tend to gravitate toward the default option. 
C) People are unaffected by default options. 
D) The government only fines companies that have over $2 million in sales each year.

Question 14

What is conspicuous consumption?

Accepted Answer

Conspicuous consumpt

Question 15

Behavioral economic policy:

Accepted Answer

A) builds on traditional economic policy. 
B) replaces traditional economic policy. 
C) is based on laissez-faire principles. 
D) supports pushes as opposed to nudges. 
A) builds on traditional economic policy. 
B) replaces traditional economic policy. 
C) is based on laissez-faire principles. 
D) supports pushes as opposed to nudges.

Question 16

What are the three situations in which a nudge can be useful? Give an example of each from your own life,and describe why a "nudge" may have been helpful.

Accepted Answer

Nudges can be helpful any time the proce

Question 17

North Carolina's school choice program gives parents a bigger say over where their children go to school. To help with the choice, parents are mailed a sheet of paper listing the average of the math and reading scores for each school they could apply to. Providing this information is an example of a(n):

Accepted Answer

A) push. 
B) nudge. 
C) shadow price. 
D) incentive compatibility problem. 
A) push. 
B) nudge. 
C) shadow price. 
D) incentive compatibility problem.

Question 18

There is always a single market coordination mechanism in economic models.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not a concern about nudge policies?

Accepted Answer

A) Very few policies meet the criterion of libertarian paternalism. 
B) Designing helpful policies is complicated. 
C) It is unclear that government knows best. 
D) Nudge policy is not strong enough to have much of an effect. 
A) Very few policies meet the criterion of libertarian paternalism. 
B) Designing helpful policies is complicated. 
C) It is unclear that government knows best. 
D) Nudge policy is not strong enough to have much of an effect.

Question 20

When looking back on past choices, some people feel they should have exercised more and eaten less. The fact that they could not make that choice at that point in time is an example of less than optimal choices resulting from the:

Accepted Answer

A) complicated nature of the choice. 
B) fact that the benefits and costs of choices are separated by time. 
C) fact that we don't make food and exercise choices very frequently. D. market system within which we make choices. 
D) market system within which we make choices. 
A) complicated nature of the choice. 
B) fact that the benefits and costs of choices are separated by time. 
C) fact that we don't make food and exercise choices very frequently. D. market system within which we make choices. 
D) market system within which we make choices.

Exam 22: Behavioral Economics and Modern Economic Policy

What does it mean to say that some modern economists are doing the work of "reverse engineers"?

What is one concern that traditional economists have about behavioral economic policy?

Money prices are:

Economists who identify a goal and then design a mechanism to achieve that goal are engaging in:

When the American League instituted designated batters (that is, pitchers were exempt from batting), the shadow prices of throwing bean-balls (a pitch aimed at the batter's head):

Sending people letters about their energy usage along with energy-saving tips is:

Why is choice architecture important? What is it?

In economics, the context in which decisions are presented is referred to as:

Which of the following is an example of a nudge?

What is a push policy and how is it related to a nudge policy? Does a push policy meet the criterion of libertarian paternalism? Why would a push policy be necessary? Give an example of a push policy.

Focusing on how people actually behave is the main motivation behind ________ economics.

Nudges are meant to:

Which of the following do firms take advantage of to maintain high profits?

What is conspicuous consumption?

Behavioral economic policy:

What are the three situations in which a nudge can be useful? Give an example of each from your own life,and describe why a "nudge" may have been helpful.

There is always a single market coordination mechanism in economic models.

Which of the following is not a concern about nudge policies?

When looking back on past choices, some people feel they should have exercised more and eaten less. The fact that they could not make that choice at that point in time is an example of less than optimal choices resulting from the:

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Microeconomic Policy, Economic Reasoning, and Beyond

Economic Growth, Business Cycles, and Unemployment

Measuring and Describing the Aggregate Economy

The Keynesian Short-Run Policy Model: Demand-Side Policies

The Classical Long-Run Policy Model: Growth and Supply-Side Policies

The Financial Sector and the Economy

Monetary Policy

Financial Crises, Panics, and Unconventional Monetary Policy

Deficits and Debt: the Austerity Debate

The Fiscal Policy Dilemma

Jobs and Unemployment

Inflation, Deflation, and Macro Policy

International Financial Policy

Macro Policy in a Global Setting

Structural Stagnation and Globalization

Macro Policy in Developing Countries

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