Question 1

As an alternative to pairwise majority voting,each voter could be asked to rank the possible outcomes,giving 1 point to her lowest choice,2 points to her second-lowest choice,3 points to her third-lowest choice,and so on.This voting method is called a(n)

Accepted Answer

A)   median vote.
B)   pairwise minority vote.
C)   Borda count.
D)   Arrow count.E) All of the above
F) B) and D)

Question 2

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

Accepted Answer

reject Lindsay's pro...

Question 3

Your friend works at a coffee shop on campus and regularly gives away free coffee to you and your friends when you visit.This is an example of

Accepted Answer

A)   a moral hazard problem.
B)   adverse selection.
C)   behavioral economics.
D)   signaling.E) All of the above
F) A) and C)

Question 4

Table 22-1
Three friends -- Tricia,Sarah,and Katie -- are deciding where to go together for vacation.They all agree that they should go to one of three places: Ireland,Italy,or Greece.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 Ireland against Italy and the second vote pits Greece against the winner of the first vote,then the outcome is as follows:

Accepted Answer

A)   Ireland wins the first vote and Greece wins the second vote,so they go to Greece.
B)   Ireland wins the first vote and Ireland wins the second vote,so they go to Ireland.
C)   Italy wins the first vote and Italy wins the second vote,so they go to Italy.
D)   Italy wins the first vote and Greece wins the second vote,so they go to Greece.E) A) and B)
F) A) and C)

Question 5

Which of the following is not an example of signaling?

Accepted Answer

A)   An employer asks if he can run a background check on a potential employee before hiring him or her.
B)   A boyfriend gives his girlfriend a necklace with her favorite gemstone for Valentine's Day.
C)   A home flooring company advertises its high Better Business Bureau rating during its television commercials.
D)   An college applicant lists her membership in academic honor societies on her application.E) C) and D)
F) None of the above

Question 6

In his 1951 book,Social Choice and Individual Values,Kenneth Arrow used the term "unanimity" to mean

Accepted Answer

A)   A beats B only if everyone prefers A to B.
B)   if everyone prefers A to B,then A beats B.
C)   if A beats B and B beats C,then A must best C.
D)   everyone who is eligible to vote must vote;otherwise,the outcome is invalid.E) None of the above
F) A) and B)

Question 7

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?

Accepted Answer

A)   Volvo drivers are not willing to take risks that they would take in another,less safe car.Driving a Volvo leads to a propensity to run stop signs.
B)   Volvo drivers are not willing to take risks that they would take in another,less safe car.Driving a Volvo reduces the propensity to run stop signs.
C)   Volvo drivers are willing to take risks that they would not take in another,less safe car.Driving a Volvo reduces the propensity to run stop signs.
D)   Volvo drivers are willing to take risks that they would not take in another,less safe car.Driving a Volvo leads to a propensity to run stop signs.E) A) and D)
F) C) and D)

Question 8

Table 22-2
Three longtime friends-Jack,Ryan,and Colin-are deciding how they will spend their Sunday afternoon.They all agree that they should do one of three things: go to a movie,go to the zoo,or go to a museum.They also agree that they will have two pairwise votes to determine how to spend their evening,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 22-2.Which of the following statements is correct?

Accepted Answer

A)   In a pairwise election,"movie" beats "zoo."
B)   In a pairwise election,"zoo" beats "baseball game."
C)   In a pairwise election,"baseball game" beats "movie."
D)   None of the above is correct.E) A) and B)
F) All of the above

Question 9

In the field of study called political economy,economists make use of insights from the field of psychology.

Accepted Answer

A) True 
 B)False

Question 10

Scenario 22-2
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 Scenario 22-2.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.E) A) and B)
F) A) and C)

Question 11

Studies of human decision making reveal several systematic mistakes people make.Which of the following is not an example of one of these mistakes?

Accepted Answer

A)   Pedro bets Michelle that he can name all 50 states in the US,but when he tries he can only name 46.
B)   Kate hears a news report about 5 people dying from a tornado in Kansas and decides to cancel her plans to visit her aunt there.
C)   Randi is a strong proponent of raising the minimum wage.She reads a research report on the effects of increasing the minimum wage and becomes even more sure of her position.
D)   Jenny is shopping for a new car and has found that Hondota cars consistently get high quality ratings.Her friend had trouble with her Hondota but Jenny still decides to purchase a Hondota.E) None of the above
F) A) and D)

Question 12

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

Accepted Answer

A)   If A is preferred to B,then B is less preferred than A.
B)   If A is preferred to B,and B is preferred to C,then A is preferred to C.
C)   If A is preferred to B and B is preferred to C,then the preference for A over B is stronger than the preference for B over C.
D)   If A is preferred to C,then there exists B such that A is preferred to B and C is preferred to A.E) All of the above
F) B) and D)

Question 13

Which of the following is an example of an adverse selection problem?

Accepted Answer

A)   A customer purchases four apples,two of which are bruised.
B)   A card shop puts its Halloween merchandise on sale on November 1st.
C)   A young worker is fired after she is late for work three times in one month.
D)   A man whose father had a heart attack wants to increase his life insurance coverage.E) All of the above
F) A) and D)

Question 14

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 job.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.E) B) and C)
F) A) and B)

Question 15

The Borda count fails to satisfy which of Kenneth Arrow's properties of a "perfect" voting system?

Accepted Answer

A)   no dictator
B)   unanimity
C)   transitivity
D)   independence of irrelevant alternativesE) A) and B)
F) All of the above

Question 16

Which of the following statements is correct?

Accepted Answer

A)   Based on studies of human decision making,most people are overconfident in their own abilities.
B)   Arrow's impossibility theorem disproves the median voter theorem.
C)   Romantic gifts are an example of adverse selection.
D)   An efficiency wage encourages workers to shirk.E) B) and D)
F) All of the above

Question 17

The 2001 Nobel prize in economics was awarded to George Akerlof,Michael Spence,and Joseph Stiglitz for their work on

Accepted Answer

A)   asymmetric information.
B)   political economy.
C)   behavioral economics.
D)   growth theory.E) C) and D)
F) None of the above

Question 18

Suppose the voters in a small country are choosing between two options,A and B.After the voting is complete it is discovered that option A recevied 100% of the votes with option B receiving no votes.After the vote,however,the country's leader decides that option B is better for the people and implements B rather than A.The voting system in this country fails which of Arrow's properties of a desirable voting system?

Accepted Answer

A)   Unanimity
B)   Transitivity
C)   Independence of irrelevant alternatives
D)   No dictatorsE) None of the above
F) A) and D)

Question 19

Frank prefers pizza to hotdogs,but only if hamburgers are not an option.Which of the properties of Arrow's impossibility theorem does Frank violate?

Accepted Answer

Independen...

Question 20

When homeowners sell a house,part of the paperwork they complete is a statement of disclosure on which the homeowners are supposed to reveal everything that they know is wrong with the house.The purpose of the statement of disclosure is to try to solve the

Accepted Answer

A)   principal-agent problem.
B)   moral-hazard problem.
C)   adverse-selection problem.
D)   signaling problem.E) B) and C)
F) C) and D)

Exam 22: Frontiers of Microeconomics

Which of the following is an example of an adverse selection problem?

Correct Answer
verified

Frank prefers pizza to hotdogs,but only if hamburgers are not an option.Which of the properties of Arrow's impossibility theorem does Frank violate?

Correct Answer
verified
Independen...
View Answer

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

Correct Answer
verified
reject Lindsay's pro...
View Answer

In the field of study called political economy,economists make use of insights from the field of psychology.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Which of the following is an example of signaling?

Correct Answer
verified

As an alternative to pairwise majority voting,each voter could be asked to rank the possible outcomes,giving 1 point to her lowest choice,2 points to her second-lowest choice,3 points to her third-lowest choice,and so on.This voting method is called a(n)

Correct Answer
verified

Your friend works at a coffee shop on campus and regularly gives away free coffee to you and your friends when you visit.This is an example of

Correct Answer
verified

The 2001 Nobel prize in economics was awarded to George Akerlof,Michael Spence,and Joseph Stiglitz for their work on

Correct Answer
verified

Correct Answer
verified

Studies of human decision making reveal several systematic mistakes people make.Which of the following is not an example of one of these mistakes?

Correct Answer
verified

The Borda count fails to satisfy which of Kenneth Arrow's properties of a "perfect" voting system?

Correct Answer
verified

Which of the following is not an example of signaling?

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
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Correct Answer
verified

In his 1951 book,Social Choice and Individual Values,Kenneth Arrow used the term "unanimity" to mean

Correct Answer
verified

Correct Answer
verified

When homeowners sell a house,part of the paperwork they complete is a statement of disclosure on which the homeowners are supposed to reveal everything that they know is wrong with the house.The purpose of the statement of disclosure is to try to solve the

Correct Answer
verified

Correct Answer
verified

Exam 22: Frontiers of Microeconomics

Which of the following is an example of an adverse selection problem?

Correct AnswerverifiedShow Answer

Frank prefers pizza to hotdogs,but only if hamburgers are not an option.Which of the properties of Arrow's impossibility theorem does Frank violate?

Correct AnswerverifiedIndependen...View AnswerShow Answer

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

Correct Answerverifiedreject Lindsay's pro...View AnswerShow Answer

In the field of study called political economy,economists make use of insights from the field of psychology.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is an example of signaling?

Correct AnswerverifiedShow Answer

As an alternative to pairwise majority voting,each voter could be asked to rank the possible outcomes,giving 1 point to her lowest choice,2 points to her second-lowest choice,3 points to her third-lowest choice,and so on.This voting method is called a(n)

Correct AnswerverifiedShow Answer

Your friend works at a coffee shop on campus and regularly gives away free coffee to you and your friends when you visit.This is an example of

Correct AnswerverifiedShow Answer

The 2001 Nobel prize in economics was awarded to George Akerlof,Michael Spence,and Joseph Stiglitz for their work on

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Studies of human decision making reveal several systematic mistakes people make.Which of the following is not an example of one of these mistakes?

Correct AnswerverifiedShow Answer

The Borda count fails to satisfy which of Kenneth Arrow's properties of a "perfect" voting system?

Correct AnswerverifiedShow Answer

Which of the following is not an example of signaling?

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In his 1951 book,Social Choice and Individual Values,Kenneth Arrow used the term "unanimity" to mean

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When homeowners sell a house,part of the paperwork they complete is a statement of disclosure on which the homeowners are supposed to reveal everything that they know is wrong with the house.The purpose of the statement of disclosure is to try to solve the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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Correct Answer
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Independen...
View Answer

Correct Answer
verified
reject Lindsay's pro...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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