Exam 22: Frontiers of Microeconomics

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?

Explain what is meant by "asymmetric information." Identify and explain the two basic types of problems that arise when there is asymmetric information.

Which of the following would be an example of a principal trying to deal with a moral hazard problem?

When one party is better informed about an economic situation than another party, economists describe the problem as one of

The suggestion that people are "satisficers" is similar to the view that people

People interpret evidence to confirm beliefs they already hold. This statement is an example of which of the following systematic mistakes that people make?

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

In corporations, which of the following are principals but not agents?

Table 22-9 Voter Type -Refer to Table 22-9. The table shows the preferences of four types of voters over four possible outcomes: A, B, C, and D. In addition, the table shows the percentage of voters of each type. Suppose a Borda count election is held in which each voter ranks the four outcomes, giving 1 point to last place, 2 points to second to last, 3 points to the second best, and 4 points to the best. In this case, which outcome would win?

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 a Borda count is used, what will be the outcome of the voting?

Which of the following is an example of signaling?

The median voter's preferred outcome is the same as the

Which of the following is not an example of signaling?

A radio story reported a study on the makes and models of cars that were observed going through intersections in the Washington, D.C. area without stopping at the stop signs. According to the story, Volvos were heavily overrepresented; the fraction of cars running stop signs that were Volvos was much greater than the fraction of Volvos in the total population of cars in the D.C. area. This is initially surprising because Volvo has built a reputation as an especially safe car that appeals to sensible, safety-conscious drivers. How is this observation best explained?

Life insurance companies usually require applicants to have physicals and disclose information on their health. This practice is designed to address

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?

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

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. What is the preferred spending amount of the median voter?

The median voter

Most economic models incorporate the assumption of rational behavior on the part of economic actors.