Question 1

A "satisficer" is a person who

Accepted Answer

A)  always chooses the best course of action. 
B)  often chooses the worst course of action. 
C)  makes decisions that are merely good enough. 
D)  studies both economics and psychology. 
A)  always chooses the best course of action. 
B)  often chooses the worst course of action. 
C)  makes decisions that are merely good enough. 
D)  studies both economics and psychology.

Question 2

According to behavioral economics if people taking an exam were asked to guess the score they would receive, it would be most likely that

Accepted Answer

A)  significantly more people would score below what they guessed than above what they guessed. 
B)  significantly more people would score above what they guessed than below what they guessed. 
C)  about the same number of people would score more than they guessed as scored less than they guessed. 
D)  people's scores would be pretty close to what they guessed. Further, any of the above would be equally likely. 
A)  significantly more people would score below what they guessed than above what they guessed. 
B)  significantly more people would score above what they guessed than below what they guessed. 
C)  about the same number of people would score more than they guessed as scored less than they guessed. 
D)  people's scores would be pretty close to what they guessed. Further, any of the above would be equally likely.

Question 3

Which voter is the voter whose views on a policy issue are in the middle of the spectrum, with half of the voters on one side of this voter's view and half on the other side.

Accepted Answer

A)  Average voter 
B)  Mean voter 
C)  Modal voter 
D)  Median voter 
A)  Average voter 
B)  Mean voter 
C)  Modal voter 
D)  Median voter

Question 4

Arrow's impossibility theorem illustrates the difficulties in creating the perfect voting system.

Accepted Answer

A) True 
 B)False

Question 5

The temptation of imperfectly-monitored workers to shirk their responsibilities is

Accepted Answer

A)  an example of the moral hazard problem. 
B)  an example of the adverse selection problem. 
C)  an example of screening. 
D)  an example of signaling. 
A)  an example of the moral hazard problem. 
B)  an example of the adverse selection problem. 
C)  an example of screening. 
D)  an example of signaling.

Question 6

Economic theory assumes people are always rational. Yet observation indicates that people do not always behave rationally. Which of the following is not a systematic mistake people make in their decisionmaking?

Accepted Answer

A)  People often interpret information to fit beliefs already held. 
B)  People place too much emphasis in their decisionmaking on a few extreme situations of which they are aware. 
C)  People tend to view current prices differently than they view future prices. 
D)  People are too sure of their own abilities. 
A)  People often interpret information to fit beliefs already held. 
B)  People place too much emphasis in their decisionmaking on a few extreme situations of which they are aware. 
C)  People tend to view current prices differently than they view future prices. 
D)  People are too sure of their own abilities.

Question 7

The Condorcet voting paradox shows that outcomes based on dictatorial preferences do not always obey the property of transitivity.

Accepted Answer

A) True 
 B)False

Question 8

Anthony and Addie are playing the ultimatum game, starting with $100. The coin flip results in Anthony being the one to propose a division of the $100. Anthony proposes that he gets $99 and Addie gets $1. Which of the following statements is correct?

Accepted Answer

A)  Because the 99­1 split isn't fair, Anthony should not make this offer. 
B)  Conventional economic theory predicts that Anthony will propose a 99-1 split, just as he did. 
C)  Experimental evidence suggests that Addie will accept the 99­1 split because, even though it isn't fair, it's better than nothing. 
D)  Economic theory predicts that Anthony should choose a 60-40 split to maximize his payoff. 
A)  Because the 99­1 split isn't fair, Anthony should not make this offer. 
B)  Conventional economic theory predicts that Anthony will propose a 99-1 split, just as he did. 
C)  Experimental evidence suggests that Addie will accept the 99­1 split because, even though it isn't fair, it's better than nothing. 
D)  Economic theory predicts that Anthony should choose a 60-40 split to maximize his payoff.

Question 9

The buyer runs a risk of being sold a good of low quality when there is

Accepted Answer

A)  a principal-agent problem. 
B)  a moral-hazard problem. 
C)  a problem involving hidden actions. 
D)  a problem involving hidden characteristics. 
A)  a principal-agent problem. 
B)  a moral-hazard problem. 
C)  a problem involving hidden actions. 
D)  a problem involving hidden characteristics.

Question 10

Informational asymmetry is a difference in

Accepted Answer

A)  efficiency. 
B)  equality. 
C)  relevant knowledge. 
D)  signaling. 
A)  efficiency. 
B)  equality. 
C)  relevant knowledge. 
D)  signaling.

Question 11

Which of the following is not an example of a principal trying to solve the moral-hazard problem? The principal

Accepted Answer

A)  calls the agent's references. 
B)  installs hidden cameras to monitor the agent's behavior. 
C)  pays the agent efficiency wages. 
D)  pays the agent a year-end bonus. 
A)  calls the agent's references. 
B)  installs hidden cameras to monitor the agent's behavior. 
C)  pays the agent efficiency wages. 
D)  pays the agent a year-end bonus.

Question 12

In American politics, we often observe that during a campaign, the Democratic and Republican positions on many issues are similar, which illustrates

Accepted Answer

A)  Arrow's impossibility theorem. 
B)  the Condorcet paradox. 
C)  a Borda count. 
D)  the median voter theorem. 
A)  Arrow's impossibility theorem. 
B)  the Condorcet paradox. 
C)  a Borda count. 
D)  the median voter theorem.

Question 13

State one reason why government intervention may not be a good solution to an asymmetric information problem.

Accepted Answer

ANSWER : Possible answers:
1. The privat

Question 14

Table 22-12
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 Table 22-12. Consider the public policy for dealing with diseased trees. Based on the preferences in the table, which of the following statements is correct?

Accepted Answer

A)  Outcome D is preferred to outcome C overall. 
B)  Outcome B is preferred to outcome C overall. 
C)  Outcome D is preferred to outcome B overall. 
D)  Outcome A is preferred to outcome D overall. 
A)  Outcome D is preferred to outcome C overall. 
B)  Outcome B is preferred to outcome C overall. 
C)  Outcome D is preferred to outcome B overall. 
D)  Outcome A is preferred to outcome D overall.

Question 15

Which of the following is an example of signaling?

Accepted Answer

A)  Pat is considering the purchase of a used car. Before making the purchase he has the car checked by an auto mechanic. 
B)  Zach is applying for a new life insurance policy. Before writing the policy, the insurance company requires Zach to be examined by a doctor. 
C)  Denise is applying for a new joc. Before hiring her, the firm requires Denise to take a drug test. 
D)  Marcus is planning to ask for Chaquila's hand in marriage. Before asking her, he buys her a box of her favorite chocolates and takes her to dinner at her favorite restaurant. 
A)  Pat is considering the purchase of a used car. Before making the purchase he has the car checked by an auto mechanic. 
B)  Zach is applying for a new life insurance policy. Before writing the policy, the insurance company requires Zach to be examined by a doctor. 
C)  Denise is applying for a new joc. Before hiring her, the firm requires Denise to take a drug test. 
D)  Marcus is planning to ask for Chaquila's hand in marriage. Before asking her, he buys her a box of her favorite chocolates and takes her to dinner at her favorite restaurant.

Question 16

Table 22-11
Five voters must choose from among four options: A, B, C, or D. Each voter's preferences are summarized in the table below. Options higher in the table are more preferred by the voter.
  
-Refer to Table 22-11. Which pairwise voting scheme would result in outcome B?

Accepted Answer

A)  First, choose between A and B. Second, voters choose between the winner of the first vote and C. Third, voters choose between the winner of the second vote and D. 
B)  First, choose between B and C. Second, voters choose between the winner of the first vote and b. Third, voters choose between the winner of the second vote and D. 
C)  First, choose between B and D. Second, voters choose between the winner of the first vote and C. Third, voters choose between the winner of the second vote and A. 
D)  First, choose between C and D. Second, voters choose between the winner of the first vote and A. Third, voters choose between the winner of the second vote and B. 
A)  First, choose between A and B. Second, voters choose between the winner of the first vote and C. Third, voters choose between the winner of the second vote and D. 
B)  First, choose between B and C. Second, voters choose between the winner of the first vote and b. Third, voters choose between the winner of the second vote and D. 
C)  First, choose between B and D. Second, voters choose between the winner of the first vote and C. Third, voters choose between the winner of the second vote and A. 
D)  First, choose between C and D. Second, voters choose between the winner of the first vote and A. Third, voters choose between the winner of the second vote and B.

Question 17

Studies of human decision making have found that people are reluctant to change their minds.

Accepted Answer

A) True 
 B)False

Question 18

The field of economics in which the tools of economics are used to understand the functioning of government is

Accepted Answer

The answer of The field of economics in which the...

Question 19

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

Accepted Answer

A)  accept Robert's proposal of keeping $99 and offering Neal $1. 
B)  accept Robert's proposal of keeping $60 and offering Neal $40. 
C)  reject Robert's proposal of keeping $99 and offering Neal $1. 
D)  reject Robert's proposal of keeping $60 and offering Neal $40. 
A)  accept Robert's proposal of keeping $99 and offering Neal $1. 
B)  accept Robert's proposal of keeping $60 and offering Neal $40. 
C)  reject Robert's proposal of keeping $99 and offering Neal $1. 
D)  reject Robert's proposal of keeping $60 and offering Neal $40.

Question 20

Table 22-12
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 Table 22-12. 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?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

A "satisficer" is a person who

According to behavioral economics if people taking an exam were asked to guess the score they would receive, it would be most likely that

Which voter is the voter whose views on a policy issue are in the middle of the spectrum, with half of the voters on one side of this voter's view and half on the other side.

Arrow's impossibility theorem illustrates the difficulties in creating the perfect voting system.

The temptation of imperfectly-monitored workers to shirk their responsibilities is

Economic theory assumes people are always rational. Yet observation indicates that people do not always behave rationally. Which of the following is not a systematic mistake people make in their decisionmaking?

The Condorcet voting paradox shows that outcomes based on dictatorial preferences do not always obey the property of transitivity.

Anthony and Addie are playing the ultimatum game, starting with $100. The coin flip results in Anthony being the one to propose a division of the $100. Anthony proposes that he gets $99 and Addie gets $1. Which of the following statements is correct?

The buyer runs a risk of being sold a good of low quality when there is

Informational asymmetry is a difference in

Which of the following is not an example of a principal trying to solve the moral-hazard problem? The principal

In American politics, we often observe that during a campaign, the Democratic and Republican positions on many issues are similar, which illustrates

State one reason why government intervention may not be a good solution to an asymmetric information problem.

Which of the following is an example of signaling?

Table 22-11 Five voters must choose from among four options: A, B, C, or D. Each voter's preferences are summarized in the table below. Options higher in the table are more preferred by the voter. -Refer to Table 22-11. Which pairwise voting scheme would result in outcome B?

Studies of human decision making have found that people are reluctant to change their minds.

The field of economics in which the tools of economics are used to understand the functioning of government is

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

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

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Exam 22: Frontiers of Microeconomics

A "satisficer" is a person who

According to behavioral economics if people taking an exam were asked to guess the score they would receive, it would be most likely that

Which voter is the voter whose views on a policy issue are in the middle of the spectrum, with half of the voters on one side of this voter's view and half on the other side.

Arrow's impossibility theorem illustrates the difficulties in creating the perfect voting system.

The temptation of imperfectly-monitored workers to shirk their responsibilities is

Economic theory assumes people are always rational. Yet observation indicates that people do not always behave rationally. Which of the following is not a systematic mistake people make in their decisionmaking?

The Condorcet voting paradox shows that outcomes based on dictatorial preferences do not always obey the property of transitivity.

Anthony and Addie are playing the ultimatum game, starting with $100. The coin flip results in Anthony being the one to propose a division of the $100. Anthony proposes that he gets $99 and Addie gets $1. Which of the following statements is correct?

The buyer runs a risk of being sold a good of low quality when there is

Informational asymmetry is a difference in

Which of the following is not an example of a principal trying to solve the moral-hazard problem? The principal

In American politics, we often observe that during a campaign, the Democratic and Republican positions on many issues are similar, which illustrates

State one reason why government intervention may not be a good solution to an asymmetric information problem.

Which of the following is an example of signaling?

Table 22-11 Five voters must choose from among four options: A, B, C, or D. Each voter's preferences are summarized in the table below. Options higher in the table are more preferred by the voter. -Refer to Table 22-11. Which pairwise voting scheme would result in outcome B?

Studies of human decision making have found that people are reluctant to change their minds.

The field of economics in which the tools of economics are used to understand the functioning of government is

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

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Filters