Question 1

Table 22-7
 
-Refer to Table 22-7.The table shows the most preferred budget of 75 voters.In an election,each voter will select the budget closest to his or her most preferred budget.Which of the following statements regarding this information is true?

Accepted Answer

A)   In an election between a $33 budget and a $37 budget,the $33 budget will win.
B)   Since the median voter theorem implies that the budget of the median voter will win the election,we would expect the overall best budget to be $25,the median of the available budgets.
C)   In an election between a $10 budget and a $40 budget,the $40 budget will win.
D)   Both b and cE) All of the above
F) A) and D)

Question 2

The Condorcet voting paradox demonstrates that democratic outcomes do not always obey the property of

Accepted Answer

A)   narrowness of preferences.
B)   concavity of preferences.
C)   asymmetry of preferences.
D)   transitivity of preferences.E) C) and D)
F) All of the above

Question 3

A firm with a very good product

Accepted Answer

A)   has a higher cost of signaling (advertising) than does a firm with an inferior product.
B)   has more to gain by signaling (advertising) than does a firm with an inferior product.
C)   does not need to signal (advertise) because the product's quality speaks for itself.
D)   will signal (advertise) effectively if signaling is free.E) A) and B)
F) A) and C)

Question 4

An efficiency wage

Accepted Answer

A)   gives an employee an incentive to shirk his duties.
B)   is lower than the equilibrium wage for that position and region.
C)   is higher than the equilibrium wage for that position and region.
D)   both a and b are correct.E) B) and C)
F) A) and B)

Question 5

Frequently it is the case that: (1) A worker knows more than his employer about how much effort he puts into his job,and (2) the seller of a used car knows more than the buyer about the car's condition.

Accepted Answer

A)   Neither (1) nor (2) serves as an example of asymmetric information.
B)   Both (1) and (2) serve as examples of asymmetric information.
C)   Neither (1) nor (2) serves as an example of a hidden action.
D)   Both (1) and (2) serve as examples of hidden action.E) A) and B)
F) None of the above

Question 6

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.E) C) and D)
F) A) and C)

Question 7

Table 22-1
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.
 
-Refer to Table 22-1.If the town administrator asks voters to choose first between hockey and basketball and then between the winner of the first vote and football,which sport will win the final vote?

Accepted Answer

The answer of Table 22-1
The citizens of Mayville are having...

Question 8

In a dictator game,player A must divide $100 between player A and player B.In this game,player B does not have the opportunity to reject an offer - he or she goes home with whatever player A offers.Experiments have observed that when player A splits the $100,he or she consistently offers over $10 to player B.Which of the following comments fits best.

Accepted Answer

A)   Although player A is acting as economic theory usually assumes,he or she makes such offers because they seem more fair.
B)   Although player A is acting as economic theory usually assumes,he or she makes such offers although they are not fair.
C)   Although player A is not acting as economic theory usually assumes,he or she makes such offers because they seem more fair.
D)   Although player A is not acting as economic theory usually assumes,he or she makes such offers because they are not fair.E) None of the above
F) A) and C)

Question 9

Which of the following is an example of asymmetric information?

Accepted Answer

A)   When someone is applying for a job,the employer checks references to determine the previous work habits of the applicant.
B)   When an employee purchases group life insurance without taking a physical exam,she knows more about her health than does the insurance company.
C)   When someone is considering buying a used car from a dealership,the potential buyer requests documentation of the repair history of the car.
D)   All of the above are correct.E) All of the above
F) A) and C)

Question 10

In economics,a difference in access to relevant knowledge is called a(n)

Accepted Answer

A)   relevancy frontier.
B)   knowledge gap.
C)   information asymmetry.
D)   information equilibrium.E) A) and C)
F) All of the above

Question 11

The field of behavioral economics builds a more subtle and complex model of economic behavior using insights from

Accepted Answer

A)   physics.
B)   biology.
C)   psychology.
D)   anthropology.E) A) and C)
F) C) and D)

Question 12

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

Accepted Answer

A)   people are overconfident
B)   people give too much weight to a small number of vivid observations
C)   people are reluctant to change their minds
D)   All of the above are correct.E) B) and D)
F) C) and D)

Question 13

Your friend works at a coffee shop on campus and regularly gives away free coffee to you and your friends when you visit.In this example,your friend is the

Accepted Answer

A)   principal and the owner of the coffee shop is the agent.
B)   agent and the owner of the coffee shop is the principal.
C)   signaler and the owner of the coffee shop is the screener.
D)   screener and the owner of the coffee ship is the signaler.E) C) and D)
F) A) and B)

Question 14

When asymmetric information affects a relationship between two parties,it is always the case that

Accepted Answer

A)   neither party is well informed.
B)   one party is better informed than the other party.
C)   both parties are equally well informed.
D)   the government is better informed than either of the two parties.E) A) and B)
F) All of the above

Question 15

Screening is an action taken by an uninformed party to induce an informed party to reveal information.

Accepted Answer

A) True 
 B)False

Question 16

Table 22-2
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 22-2.If the election is conducted by instant runoff,the final two options will be

Accepted Answer

A)   Costa Rica and Spain.
B)   Spain and Mexico.
C)   Mexico and Costa Rica.
D)   Ecuador and Mexico.E) None of the above
F) A) and D)

Question 17

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

Accepted Answer

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

Question 18

Evidence from experiments in which real people play the ultimatum game supports the idea that people care about fairness as well as about maximization of their personal wealth.

Accepted Answer

A) True 
 B)False

Question 19

Economists use basic psychological insights in the field of study called

Accepted Answer

A)   psychological economics.
B)   transitional economics.
C)   behavioral economics.
D)   social economics.E) A) and D)
F) B) and C)

Question 20

Juanita is preparing to study for her economics final exam.She tells her friend that she will be happy if she just gets a B,even though she could likely earn an A if she studied harder.Juanita is what Herbert Simon would call a

Accepted Answer

A)   rational maximizer.
B)   satisficer.
C)   homo economicus.
D)   screener.E) B) and C)
F) A) and D)

Exam 22: Frontiers of Microeconomics

Evidence from experiments in which real people play the ultimatum game supports the idea that people care about fairness as well as about maximization of their personal wealth.

Correct Answer
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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.In this example,your friend is the

Correct Answer
verified

A "satisficer" is a person who

Correct Answer
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When asymmetric information affects a relationship between two parties,it is always the case that

Correct Answer
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Which of the following is an example of asymmetric information?

Correct Answer
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In economics,a difference in access to relevant knowledge is called a(n)

Correct Answer
verified

Table 22-7 -Refer to Table 22-7.The table shows the most preferred budget of 75 voters.In an election,each voter will select the budget closest to his or her most preferred budget.Which of the following statements regarding this information is true?

Correct Answer
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Screening is an action taken by an uninformed party to induce an informed party to reveal information.

Correct Answer
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Juanita is preparing to study for her economics final exam.She tells her friend that she will be happy if she just gets a B,even though she could likely earn an A if she studied harder.Juanita is what Herbert Simon would call a

Correct Answer
verified

An efficiency wage

Correct Answer
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The field of behavioral economics builds a more subtle and complex model of economic behavior using insights from

Correct Answer
verified

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

Correct Answer
verified

Economists use basic psychological insights in the field of study called

Correct Answer
verified

The Condorcet voting paradox demonstrates that democratic outcomes do not always obey the property of

Correct Answer
verified

Frequently it is the case that: (1) A worker knows more than his employer about how much effort he puts into his job,and (2) the seller of a used car knows more than the buyer about the car's condition.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

A firm with a very good product

Correct Answer
verified

Exam 22: Frontiers of Microeconomics

Evidence from experiments in which real people play the ultimatum game supports the idea that people care about fairness as well as about maximization of their personal wealth.

Correct AnswerverifiedShow Answer

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.In this example,your friend is the

Correct AnswerverifiedShow Answer

A "satisficer" is a person who

Correct AnswerverifiedShow Answer

When asymmetric information affects a relationship between two parties,it is always the case that

Correct AnswerverifiedShow Answer

Which of the following is an example of asymmetric information?

Correct AnswerverifiedShow Answer

In economics,a difference in access to relevant knowledge is called a(n)

Correct AnswerverifiedShow Answer

Table 22-7 -Refer to Table 22-7.The table shows the most preferred budget of 75 voters.In an election,each voter will select the budget closest to his or her most preferred budget.Which of the following statements regarding this information is true?

Correct AnswerverifiedShow Answer

Screening is an action taken by an uninformed party to induce an informed party to reveal information.

Correct AnswerverifiedShow Answer

Juanita is preparing to study for her economics final exam.She tells her friend that she will be happy if she just gets a B,even though she could likely earn an A if she studied harder.Juanita is what Herbert Simon would call a

Correct AnswerverifiedShow Answer

An efficiency wage

Correct AnswerverifiedShow Answer

The field of behavioral economics builds a more subtle and complex model of economic behavior using insights from

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Economists use basic psychological insights in the field of study called

Correct AnswerverifiedShow Answer

The Condorcet voting paradox demonstrates that democratic outcomes do not always obey the property of

Correct AnswerverifiedShow Answer

Frequently it is the case that: (1) A worker knows more than his employer about how much effort he puts into his job,and (2) the seller of a used car knows more than the buyer about the car's condition.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A firm with a very good product

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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