Exam 22: Frontiers of Microeconomics

Suppose that residents of a town are asked to vote on the best day to improve the safety of an intersection. The three choices are: a stoplight, a 4-way stop, and a 2-way stop. The mayor asks the residents to assign 3 points to their first choice, 2 points to their second choice, and 1 point to their last choice. The intersection will be controlled by the method that receives the most points. This voting scheme is called

The Condorcet paradox

Majority rule will produce the outcome most preferred by the median voter, as demonstrated by the

Employers may choose to pay their workers a wage that exceeds the equilibrium wage according to

Studies of human decision-making show that

Moral hazard and adverse selection are similar asymmetric information problems but moral hazard involves hidden actions while adverse selection involves hidden characteristics.

Which of the following is not an example of asymmetric information?

Which of the following is an example of moral hazard?

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 $3 million, the median voter would vote for

Which of the following is a characteristic of a corporation but not of a small family-owned business?

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

Table 22-25 Sophie, Huan, and Santiago are lost with no map or GPS available. They come to an intersection at which they can turn left, turn right, or continue going straight. Their preferences are summarized in the table. -Refer to Table 22-25. The travelers decide to conduct pairwise voting with the majority determining the outcome of each vote to decide their next move. Sophie is very confident that the travelers need to go left but she is having a difficult time convincing her friends. If she wants to ensure that the result of the voting is "left," how should she organize the voting?

Which of the following statements is not correct?

The adverse selection problem is a likely explanation for the fact that

Table 22-14 Amy, Beth, and Connie are on a hiring committee. They have interviewed 3 candidates identified by their last names and are going to vote on which one is hired. -Refer to Table 22-14. What would the results of a Borda Count vote be?

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

Which of the following is not an example of signaling?

Table 22-8 The citizens of Mayville are having a severe budget shortage and are faced with eliminating athletics from the town high school. The town administrator has determined that the town can afford to maintain one sport. 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. Voter Type -Refer to Table 22-8. If the town administrator first asks the citizens to vote for hockey or basketball and then asks them to choose between the winner of the first vote and football, what will be the outcome?

Which of the following students exhibits satisficing behavior?

Pete owns a small store. He has noticed that when he is not at the store monitoring his employees, his revenue goes down. What are two changes Pete could make to wages he pays his employees to correct this problem?