Exam 22: Frontiers of Microeconomics

Table 22-17 Voter Type -Refer to Table 22-17. The table shows the preferences of three types of voters over three possible outcomes: A, B, and C. In addition, the table shows the percentage of voters of each type. Based on this information, which of the following statements is true?

The Condorcet paradox demonstrates that the result of a majority vote may be affected by

Ed promises his wife that he will mow the lawn on Saturday morning, but when Saturday morning arrives he changes his mind and says he will do it on Sunday. What insight about human behavior can be deduced from Ed's decision?

Table 22-24 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 22-24. If the town administrator asks voters to choose first between basketball and football and then between the winner of the first vote and hockey, which sport will win the final vote?

Table 22-10 The town of Franklin is facing a severe budget shortage. The town administrator has proposed four options to balance the budget: increase property taxes (taxes), cut the school arts budget (arts), turn off half of the streetlights in the town (streetlights), reduce police patrols (police). Exactly one of the four 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 22-10. If a Borda count is used, which option will win?

An example of signaling is a boyfriend giving an expensive, romantic gift to his girlfriend to convey his love for her.

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. Suppose that before the family can arrive at their decision, Opryland announced that it will be closed for the season due to flooding. If the family uses a Borda count, their vacation destination will be

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

Which of the following is not an example of a moral hazard problem?

Table 22-6 -Refer to Table 22-6. 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?

Which of the following frontier areas of economics incorporates some findings from psychology into the study of economic issues?

An implication of the median voter theorem is that Republicans and Democrats will try to align their views with those of the median voter.

When markets fail, which of the following is true?

Which of the following is not a common response to the moral hazard problem that employers face?

One way that employers respond to the moral-hazard problem is by monitoring their employees.

The Condorcet paradox demonstrates that the order in which people vote on choices may influence the final outcome.

An insurance company that writes automobile policies tries to separate safe drivers from risky drivers by offering policies that feature different deductibles and different premiums. This practice is best described as an example of

According to one survey 76 percent of Americans said they were not saving enough for retirement. This example of inconsistency over time

When a night watchman only performs two walk-throughs per night when he is being paid to perform five walk- throughs per night, it is an example of

Lindsay and Tim are playing the ultimatum game starting with $100. Based on the coin toss, Lindsay is the player to propose a division of the $100. If Lindsay acts as economic theory assumes and Tim acts as experimental evidence shows, Tim will