Exam 22: Frontiers of Microeconomics

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

If A is preferred to B and B is preferred to C, then we would expect A to be preferred to C. This property is called

Ihaveathousandfriends Social Networking firm had a remarkably profitable year. As a result, its employees expect to receive bonus checks. Which of the following insights into human behavior do the employees exhibit?

Evidence from experiments in which real people play the ultimatum game supports the idea that people

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?

Table 22-6 -Refer to Table 22-6. The table shows the preferences of 100 voters over three possible outcomes: A, B, and C. Which of the following statements is true?

Table 22-23 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 22-23. If a Borda count is used, which option will win?

Which of the following is a reason to think that government action may not be valuable to improve market outcomes with asymmetric information?

Maria and Jose installed a "nanny­camera" in their home so that they can view how the nanny is interacting with their children while they are at work. What type of problem are they trying to combat?

Which of the following practices would indicate that an employer is trying to overcome a moral-hazard problem with his employees?

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 the town administrator asks voters to choose first between increasing taxes and turning off half of the streetlights, and then between the winner of the first vote and reducing police patrols, and then between the winner of the second vote and cutting the school arts budget, which choice will win the final vote?

Which of the following sets of preferences satisfies the property of transitivity?

The mathematical result showing that a majority rule voting system will produce the outcome most preferred by the voter exactly in the middle of the distribution is called the

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

The majority of Americans, when asked how many states they could name, think they could name all fifty. However, when they are asked to do so, very few are able to come up with all fifty. This is an example of which systematic mistake that people make?

Which of the following offers an explanation as to why the principal-agent problem exists for a firm?

Which of the following is not an example of an adverse selection problem?

Which of the following statements captures the meaning of transitivity of preferences?

Table 22-1 Three friends -- Linda, Stephanie, and Jamie -- are deciding where to go together for vacation. They all agree that they should go to one of three places: France, Greece, or Italy. They also agree that they will have two pairwise votes to determine where to go on vacation, with the majority determining the outcome on each vote. The first, second, and third choices for each person are as indicated in the table below. -Refer to Table 22-1. If the first vote pits France against Greece and the second vote pits Italy against the winner of the first vote, then the outcome is as follows:

In economics, a difference in access to relevant knowledge is called a behavioral asymmetry.