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Exam 22: Frontiers of Microeconomics

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Question 41

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Which of the following events best exemplifies the concept of signaling?

A) A college student's parents,having learned that their child is short of money,send her a check for $1,000.
B) A woman,who is trying to win the love of a certain man,buys him a very personal gift.
C) A grocery store maintains a policy of examining the driver's license of everyone who writes a personal check to purchase his groceries.
D) A university maintains a policy of considering for admission only those students who graduated among the top ten percent of their high school class.

E) All of the above
F) A) and D)

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Question 42

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Table 22-16 Citizens in a small town are deciding how best to develop a plot of land at the center of town.They have narrowed the options to: a park,town hall,gas station,restaurant.The voters' preferences are shown in the table below. -Refer to Table 22-16.If the election is conducted by instant runoff,the election winner will be

A) park.
B) restaurant.
C) town hall.
D) gas station.

E) A) and B)
F) A) and C)

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Question 43

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A "satisficer" is a person whose decisionmaking is the same as that predicted by mainstream economic models.

The problem that arises when one person performs a task on behalf of another person is called

Scenario 22-4 Suppose that residents of a town are asked to vote on the best way to improve the safety of an intersection.The three choices are: a stoplight,a 4-way stop,and a 2-way stop.The voters are divided into three groups based on their preferences. Voter Type -Refer to Scenario 22-4.Based on the information in the table,which of the following statements is true?

The Arrow impossibility theorem shows that

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

Assume there are two major political parties: the Conservatives and the Liberals.What does the median voter theorem imply about the nature of the platforms (that is,policy stances)of the Conservatives and Liberals?

Pedro,who knows nothing about construction,paid Benito to remodel a room in his house.Two years later,one wall in the remodeled room crumbled because Benito used poor-quality materials.This illustrates which economic problem?

The Condorcet paradox demonstrates that the order in which people vote on choices may influence the final outcome.

In his 1951 book Social Choice and Individual Values,Arrow's perfect voting system satisfies all of the following properties except

The results of the ultimatum game illustrate the fact that

Table 22-15 The town of Portsmouth is considering a renovation to the high school.The voters in Portsmouth have different preferences on the budget for the renovation as displayed below. -Economic theory assumes that voters,politicians,and other political participants are largely motivated by

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 first votes to be reassigned will be the first choice votes of

Table 22-3 The citizens of Anytown will decide whether to build a new library,a new community center,or a new ice rink.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 22-3.If the citizens of Anytown use a Borda count,rather than pairwise majority voting,to decide what to build,then they will build a new

Table 22-5 The 500 voters of Appleton are deciding by majority rule how much to spend on a new library. -Refer to Table 22-5.The median voter prefers to spend

Table 22-14 The Johnson family is planning a vacation and,though Mr.and Mrs.Johnson will be paying for the trip,they have decided to use a democratic voting process to choose their destination.The family members' preferences are reflected in the table below. -Refer to Table 22-14.Suppose that before the family can arrive at their decision,Opryland announced that it will be closed for the season due to flooding.Mr.Johnson recommends using a vote by majority rule and proposes first choosing between the Grand Canyon and Sea World,and then choosing between the winner of the first vote and Disneyland.If everyone votes according to their preferences,

One way that employers respond to the moral-hazard problem is by monitoring their employees.

A safe driver would likely choose an auto insurance policy with a

A mother gives her teenage daughter two choices: spend 20 minutes cleaning her room today or spend 25 minutes cleaning her room tomorrow.The same mother gives her same daughter two additional choices: clean out the garage for 20 minutes next Tuesday or 25 minutes next Wednesday.According to economic theory,