Exam 22: Frontiers of Microeconomics

Table 22-9 -Refer to Table 22-9.The table shows the preferences of 100 voters over three possible outcomes: A,B,and C.If a Borda count election were held among these voters,giving three points to each voter's first choice,two points to the second choice,and one point to the last choice,which outcome would win the election?

In corporations,which of the following are principals but not agents?

The field of political economy

Screening occurs when

Table 22-3 The citizens of Paradoxopolis will decide whether to build a new school,build a new park,or build a new road.Exactly one of the three choices will prevail,and the choice will be made by way of pairwise voting,with the majority determining the outcome on each vote.The preferences of the voters are summarized in the table below. -Refer to Table 22-3.Which of the following statements is correct?

Informational asymmetry may apply to a hidden action or hidden characteristic where the informed party may be reluctant to reveal relevant information.

Most economic models incorporate the assumption of rational behavior on the part of economic actors.

Scenario 22-2 The following table shows the preferences for the five voters in a city regarding how to deal with the city's diseased trees. A = do nothing B = Follow the expert's advice to remove every tree C = remove every 4th tree now and perhaps more later D = use an untested spraying alternative -Refer to Scenario 22-2.Consider the public policy for dealing with the diseased trees.Using pairwise majority voting with A versus B,then the winner of that vote versus C,then the winner of that vote versus D,which policy wins?

Scenario 22-4 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 Scenario 22-4.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:

Based on the studies of human decision making,which of the following statements is correct?

The 2001 Nobel prize in economics was awarded to George Akerlof,Michael Spence,and Joseph Stiglitz for their work on

When a jeweler sells a low quality diamond to a young man who believes the diamond is the highest quality,she is engaging in

Suppose that in a Borda count election,outcome X is preferred to outcome Y,and outcome Y is preferred to outcome Z,when outcomes X,Y,and Z are all available options.When Y is removed as an option,however,outcome Z is preferred to outcome X.This would violate Arrow's assumption that voting systems should satisfy

A "satisficer" is a person whose decisionmaking is the same as that predicted by mainstream economic models.

Scenario 22-4 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 Scenario 22-4.If the vote were conducted according to a Borda count system where each person's first choice receives 3 points,second choice 2 points,and third choice 1 point,the result would be

Adverse selection may lead to

Scenario 22-4 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 Scenario 22-4.Which of the following statements is correct regarding the Condorcet paradox and the results of pairwise voting on how to improve the safety of the intersection?

Table 22-3 The citizens of Paradoxopolis will decide whether to build a new school,build a new park,or build a new road.Exactly one of the three choices will prevail,and the choice will be made by way of pairwise voting,with the majority determining the outcome on each vote.The preferences of the voters are summarized in the table below. -Refer to Table 22-3.If (1)the first vote pits "school" against "road," and (2)the second vote pits "park" against the winner of the first vote,then the outcome is as follows:

Informational asymmetry is a difference in

According to the median voter theorem,majority rule will