Exam 22: Frontiers of Microeconomics

Your friend tells you that her dad just suffered from a stroke because his blood pressure and cholesterol were too high. You know that your own father also has high blood pressure so you become worried that he will also have a stroke. This is an example of which systematic mistake that people make?

The problem that results from an agent, who is imperfectly monitored by the principal, engaging in dishonest or otherwise undesirable behavior is called

You own an ice cream store and are concerned that an employee may be giving generous scoops to friends and relatives and smaller scoops to some other customers. This may be reducing sales. In this example, you are the

The science of economics is a finished jewel, perfect and unchanging.

Suppose you are covered under health insurance or belong to a Health Maintenance Organization (HMO), and you are insured against all or most of the costs of visits to the doctor. As a result you are likely to make greater use of medical services of all kinds. This tendency of people with insurance to change their behavior in a way that leads to more claims against the insurance company is called

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 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

Martha routinely has her prescriptions filled at her local SVC pharmacy. Each time that Martha goes to pick up a prescription, there is some problem and Martha has to return to the pharmacy later to get the prescription. Martha finds these return trips very annoying and time-consuming, but continues to request that her doctor send her prescriptions to this pharmacy even though there are several other options in her town. Which of the following is correct?

The tendency of many people to procrastinate supports the view that people are consistent over time.

An implication of the median voter theorem is that, in a race between Republicans and Democrats,

The Condorcet voting paradox demonstrates that democratic outcomes do not always obey the property of

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

Table 22-21 The following table shows the number of voters preferring various amounts of spending to develop a river to make it more attractive for canoeing and kayaking. -Refer to Table 22-21. Suppose on election day that the voters with a preference for less than $1.5 million do not show up to vote on a choice to spend either $2 million or $2.5 million. In this case, what is the preferred spending amount of the median voter (among those who actually cast a vote)?

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 Beth or Mary, and then choose either the winner or Fred, what would the results be?

What insight into human behavior do economist learn from observing people playing the ultimatum game?

The classic example of adverse selection is the

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

Arrow's impossibility theorem states that the majority rule fails to produce transitive preferences for society.

The ultimatum game reveals that

Which of the following sets of preferences satisfies the property of transitivity?

A firm with a very good product