Exam 22: Frontiers of Microeconomics

Table 22-18 The following table shows the preferences of four types of voters over four possible alternatives as well as the percentage of the electorate with the given preferences. -Refer to Table 22-18. In a majority vote between alternatives X and Y, what percentage of the votes would X receive?

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. If you want your employee to stop giving larger scoops to friends and relatives, which of the following is not a good approach?

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 D?

An action taken by an informed party to reveal private information to an uninformed party is called

Table 22-13 A high school Spanish class and their teacher are planning to take a Spring Break trip abroad but they have to decide where to go. They have narrowed the options to: Spain, Mexico, Ecuador, and Costa Rica. The voters' preferences are shown in the table below. -Refer to Table 22-13. In a pairwise election between Costa Rica and Ecuador and then a second election between the winner and Mexico, which countries are chosen?

The Condorcet paradox shows that

People with hidden health problems are more likely to buy health insurance than are other people. This is an example of

In corporations, a principal-agent problem can arise when

A travel agency offers a money-back guarantee for vacationers taking their first cruise in case they do not enjoy the experience. This guarantee is an example of

Adverse selection

Susan buys automobile insurance from Provident Insurance Company. If Susan avoids having an accident for three years, Provident will reduce the premiums she has to pay for her insurance. Nevertheless, she routinely drives while eating or texting and speeds up to try to make it through yellow lights.

Borda count is a voting method often used in polls that rank sports teams.

When a corporation decides to include its own corporate stock as part of the compensation for its employees, it is trying to solve the

According to behavioral economics, participants in a half-marathon are likely to have trained

Moral hazard occurs when

Information asymmetry refers to

Mankiw argues that a primary difference between taxing products like gasoline and taxing soda and other sugary drinks is that

Scenario 22-3 At issue in a particular city vote is how much to spend, per person, on road repair next year. Among the 10,000 voters, 2,900 prefer to spend $500 per person, but no more; 2,200 prefer to spend $600 per person, but no more; 1,900 prefer to spend $800 per person, but no more; 1,600 prefer to spend $1,200 but no more, and 1,400 prefer to spend $1,400 per person, but no more. -Refer to Scenario 22-3. If there is a vote on whether to spend $800 per person or $1,200 per person, the median voter will vote to spend

Rather than always choosing the best course of action, humans make decisions that are merely good enough. In other words, they are

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