Exam 22: Frontiers in Microeconomics

If preferences exhibit the property of transitivity, then

Ihaveathousandfriends Social Networking firm had a remarkably profitable year. As a result, its employees expect to receive bonus checks. Which of the following insights into human behavior do the employees exhibit?

Scenario 22-3 ​ At issue in a particular city vote is how much to spend, per person, on road repair next year. Among the 10,000 voters, 2,900 prefer to spend $500 per person, but no more; 2,200 prefer to spend $600 per person, but no more; 1,900 prefer to spend $800 per person, but no more; 1,600 prefer to spend $1,200 but no more, and 1,400 prefer to spend $1,400 per person, but no more. -Refer to Scenario 22-3. If there is a vote on whether to spend $600 per person or $800 per person, the median voter will vote to spend

Brandon is considering buying a used car but he first downloads a report from the internet that shows the history of accidents and major repairs conducted on the car. This action is called

The state of Massachusetts requires all citizens to purchase medical insurance or face a monetary penalty when filing their taxes. The penalty is significantly less than the average annual insurance premium. Moreover, the state requires insurance companies to issue policies to anyone who applies, regardless of their health at the time of application. Which of the following examples describes the inherent adverse selection problem?

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. Based on the information in the table, which of the following statements is true?

Which of the following is an example of signaling?

Table 22-15 Diane, Henry, and Linda are voting for who to promote. They can only promote one candidate. Their preferences are given in the table below. -Refer to Table 22-15. If elections were held where voters choose either Fred or Beth, and then choose either the winner or Mary, what would the results be?

In the field of study called political economy, economists make use of insights from the field of psychology.

If A is preferred to B and C is preferred to D, then B must be preferred to C to satisfy transitivity.

Which of the following is an example of moral hazard?

The problem that arises when one person performs a task on behalf of another person is called

In economics, a difference in access to relevant knowledge is called a(n)

Frequently it is the case that: (1) A worker knows more than his employer about how much effort he puts into his job, and (2) the seller of a used car knows more than the buyer about the car's condition.

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 2-way stop against a 4-way stop and the second vote pits a stoplight against the winner of the first vote, then the outcome is as follows:

Scenario 22-2 A wireless telephone service provider offers three service plans to its consumers. -Refer to Scenario 22-2. By offering consumers these choices, the wireless telephone provider is

Normally, we expect voters' preferences to exhibit a property called

Adverse selection is

The Condorcet paradox

Riley travels a great deal, and over the past several years he has read dozens of reviews of hotel chains, all of which rave about the clean rooms and great service at Comeon Inns. Last month, Riley checked into a room at a Comeon Inn for the first time, only to find the room filthy and the service lousy. He decided the Comeon Inn chain is inferior to other hotel chains.