Exam 22: Frontiers in Microeconomics

Table 22-16 The Johnson family is planning a vacation and, though Mr. and Mrs. Johnson will be paying for the trip, they have decided to use a democratic voting process to choose their destination. The family members' preferences are reflected in the table below. -Refer to Table 22-16. Mr. Johnson recommends using a vote by majority rule. If he wants to ensure that his 1st choice becomes the family's winning destination, he should propose

​​When a principal attempts to get an agent to reveal his or her private information, which of the following is occurring?

Screening is an action taken by an uninformed party to induce an informed party to reveal information.

Table 22-4 The fortunate residents of Anytown have a budget surplus. The mayor decided that it is only fair to have the residents vote on what to do with the surplus. The mayor has narrowed the options down to three possible projects: a playground, a library, or a swimming pool. The voters fall into three categories and have preferences as illustrated in the table. -Refer to Table 22-4. If the mayor decides to use a Borda count rather than pairwise voting,

​A car mechanic knowing more about what's wrong with your vehicle than you do is best explained by which of the following concepts:

Adverse selection

​Economists have found that entrepreneurs are likely to have subjective beliefs about the probability of entrepreneurial success that are higher than the actual objective probabilities. These beliefs are most closely related to which of the following behavior concepts?

How have insights from the field of psychology influenced the thinking of economists in recent years?

Table 22-7 Suppose that residents of a town are asked to vote on the best way to improve the safety of an intersection. The three choices are: a stoplight, a 4-way stop, and a 2-way stop. The voters are divided into three groups based on their preferences. Voter Type -Refer to Table 22-7. If the first vote pits a stoplight against a 4-way stop and the second vote pits a 2-way stop against the winner of the first vote, then the outcome is as follows:

Experiments show that when real people play the ultimatum game, starting with $100,

Life insurance companies usually require applicants to have physicals and disclose information on their health. This practice is designed to address

Table 22-16 The Johnson family is planning a vacation and, though Mr. and Mrs. Johnson will be paying for the trip, they have decided to use a democratic voting process to choose their destination. The family members' preferences are reflected in the table below. -Refer to Table 22-16. Mr. Johnson recommends using a vote by majority rule and proposes first choosing between Opryland and the Grand Canyon, then choosing between the winner of the first vote and Sea World, and finally choosing between the winner of the second vote and Disneyland. If everyone votes according to their preferences,

The results of the ultimatum game illustrate that

Table 22-19 The 600 voters of Appleton are deciding by majority rule how much to spend on a new library. -Refer to Table 22-19. If an election were held between spending $2 million and $4 million, the median voter would vote for

A Principles of Microeconomics professor wants to know how much prior knowledge her students have before beginning the class so she gives them a pre-test. This action is an example of

Juanita is preparing to study for her economics final exam. She tells her friend that she will be happy if she just gets a B, even though she could likely earn an A if she studied harder. Juanita is what Herbert Simon would call a

Which of the following would be an example of a principal trying to deal with a moral hazard problem?

People are willing to give up monetary rewards to promote fairness.​

The Condorcet voting paradox applies to situations in which voters

Scenario 22-6 ​ Shana owns a boutique that sells high-end women's clothing and accessories. Katie works part-time at the boutique and frequently is the only employee in this small store. Shana pays Katie a wage that is higher than the market wage for this type of job. When the store is not full of customers, Katie diligently works on displays and cleans to keep the store looking its best. Belinda is a customer in the store who asks Katie's opinion on the quality of some jeans she is considering purchasing. Katie tells her the quality is great even though she's had several other customers return them due to flaws. Magda is another customer who is returning a necklace without volunteering that a gem is missing. -Refer to Scenario 22-6. What is the name for the problem Katie creates by lying about the quality of the jeans?