Question 1

Table 22-14
Amy, Beth, and Connie are on a hiring committee. They have interviewed 3 candidates identified by their last names and are going to vote on which one is hired.  '
-Refer to Table 22-14. What would the results of a Borda Count vote be?

Accepted Answer

A)  Adams and Brown tie.
B)  Adams wins.
C)  Brown wins.
D)  Campbell wins.E) B) and C)
F) C) and D)

Question 2

Scenario 22-3
​
At issue in a particular city vote is how much to spend, per person, on road repair next year. Among the 10,000 voters, 2,900 prefer to spend $500 per person, but no more; 2,200 prefer to spend $600 per person, but no more; 1,900 prefer to spend $800 per person, but no more; 1,600 prefer to spend $1,200 but no more, and 1,400 prefer to spend $1,400 per person, but no more.
-Refer to Scenario 22-3. The median voter is one who prefers to spend

Accepted Answer

A)  $500.
B)  $600.
C)  $800.
D)  None of the above are correct.E) A) and B)
F) A) and C)

Question 3

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?

Accepted Answer

A)  Beth would win both elections.
B)  Beth would win the first election and Fred would win the second election.
C)  Mary would win the first and second elections.
D)  Mary would win the first election and Fred would win the second election.E) All of the above
F) None of the above

Question 4

An insurance company that writes automobile policies tries to separate safe drivers from risky drivers by offering policies that feature different deductibles and different premiums. This practice is best described as an example of

Accepted Answer

A)  screening.
B)  behavioral economics.
C)  monitoring.
D)  signaling.E) None of the above
F) B) and C)

Question 5

An action taken by an informed party to reveal private information to an uninformed party is called

Accepted Answer

The answer of An action taken by an informed party...

Question 6

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 $4 million, the median voter would vote for

Accepted Answer

A)  $2 million and $2 million would win.
B)  $2 million and $3 million would win.
C)  $4 million and $2 million would win.
D)  $4 million and $4 million would win.E) All of the above
F) B) and D)

Question 7

​The median voter theorem states that

Accepted Answer

A)  ​the median voter will never hold the decisive vote in an election.
B)  ​policies that are enacted will be least preferable to the median voter.
C)  ​the median voter will hold the decisive vote in an election.
D)  ​policies that are enacted will be most preferred by the median voter.E) B) and D)
F) A) and D)

Question 8

In corporations, a principal-agent problem can arise when

Accepted Answer

A)  the shareholders are the principal and the managers are the agent.
B)  the board of directors is the principal and the managers are the agent.
C)  the shareholders are the principal and the board of directors is the agent.
D)  All of the above are correct.E) A) and C)
F) All of the above

Question 9

Table 22-17 
-Refer to Table 22-17. The table shows the preferences for three types of voters over three possible outcomes: A, B, and C. The table also shows the percentage of voters of each type. Based on this information, which of the following statements is true?

Accepted Answer

A)  In a vote between B and C, C loses since only the Type 1 voters prefer C to B.
B)  In a vote between A and B, B wins getting 85% of the total vote.
C)  In a vote between A and C, C loses getting only 45% of the total vote.
D)   Both a and b.E) A) and D)
F) None of the above

Question 10

Severe adverse-selection problems may result in

Accepted Answer

A)  too few good used cars being offered for sale.
B)  wages that are too low relative to equilibrium levels.
C)  too many good drivers buying too much automobile insurance.
D)  people with average health buying too much health insurance.E) A) and D)
F) B) and C)

Question 11

Arrow's impossibility theorem states that the majority rule fails to produce transitive preferences for society.

Accepted Answer

A) True 
 B)False

Question 12

The moral-hazard problem and the desire of firms to lessen that problem serve as a plausible explanation for a firm paying above-equilibrium wages to its workers.

Accepted Answer

A) True 
 B)False

Question 13

​Which of the following frontier areas of microeconomics applies economic tools to the study of government (or public)  choice?

Accepted Answer

A)  ​Political economy
B)  ​Behavioral economics
C)  ​Game theory
D)  ​Industrial organizationE) All of the above
F) B) and C)

Question 14

Which of the following would violate transitivity?

Accepted Answer

A)  Vanessa likes A more than B, C more than B, and C more than A.
B)  Jay likes C more than B, A more than B, B more than D, and C more than D.
C)  Maddy likes C more than A, B more than D, A more than B, and D more than C.
D)  Victoria likes C more than B, C more than D, and B more than D.E) B) and D)
F) A) and B)

Question 15

Economist Kenneth Arrow wrote a famous book in 1951 in which he took up the question,

Accepted Answer

A)  Is there a perfect voting system?
B)  Are preferences transitive?
C)  Is a dictatorship a good form of government?
D)  Does Democracy work?E) B) and C)
F) A) and D)

Question 16

Which of the following is an example of screening?

Accepted Answer

A)  A lender checks a loan applicants credit history.
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 seller knows the repair history of the car but the potential buyer does not.
D)  All of the above are correct.E) All of the above
F) A) and B)

Question 17

Which of the following is not a common response to the moral hazard problem that employers face?

Accepted Answer

A)  offering all employees some funding for additional education
B)  paying efficiency wages
C)  requiring employees to provide itemized receipts for reimbursable expenses
D)  paying year-end bonuses rather than higher monthly earningsE) C) and D)
F) All of the above

Question 18

When some people are better informed than others and the imbalance affects the choices they make, economists say there is

Accepted Answer

asymmetric...

Question 19

According to one survey 76 percent of Americans said they were not saving enough for retirement. This example of inconsistency over time

Accepted Answer

A)  is rational behavior.
B)  likely occurs because saving requires a sacrifice in the present for a reward in the distant future.
C)  likely occurs because Americans don't care about retirement.
D)  definitely would not happen if Americans earned a greater return on their investments.E) A) and D)
F) None of the above

Question 20

If individuals behave irrationally in some circumstances, why do economists typically assume that they behave rationally?​

Accepted Answer

A)  ​The assumption of rationality allows economists to make powerful statements that apply the majority of the time.
B)  ​The assumption of rationality was used before psychologists discovered ways in which individuals behave irrationally.
C)  ​The assumption of rationality is used because economists do not understand principles of psychology.
D)  ​The assumption of rationality has yet to be refuted with scientific evidence.E) A) and B)
F) A) and C)

Exam 22: Frontiers in Microeconomics

Which of the following is an example of screening?

Correct Answer
verified

Severe adverse-selection problems may result in

Correct Answer
verified

The median voter theorem states that

Correct Answer
verified

Which of the following would violate transitivity?

Correct Answer
verified

Which of the following frontier areas of microeconomics applies economic tools to the study of government (or public) choice?

Correct Answer
verified

If individuals behave irrationally in some circumstances, why do economists typically assume that they behave rationally?

Correct Answer
verified

An action taken by an informed party to reveal private information to an uninformed party is called

Correct Answer
verified

According to one survey 76 percent of Americans said they were not saving enough for retirement. This example of inconsistency over time

Correct Answer
verified

An insurance company that writes automobile policies tries to separate safe drivers from risky drivers by offering policies that feature different deductibles and different premiums. This practice is best described as an example of

Correct Answer
verified

The moral-hazard problem and the desire of firms to lessen that problem serve as a plausible explanation for a firm paying above-equilibrium wages to its workers.

Correct Answer
verified

Economist Kenneth Arrow wrote a famous book in 1951 in which he took up the question,

Correct Answer
verified

Table 22-17 -Refer to Table 22-17. The table shows the preferences for three types of voters over three possible outcomes: A, B, and C. The table also shows the percentage of voters of each type. Based on this information, which of the following statements is true?

Correct Answer
verified

Correct Answer
verified

Arrow's impossibility theorem states that the majority rule fails to produce transitive preferences for society.

Correct Answer
verified

Which of the following is not a common response to the moral hazard problem that employers face?

Correct Answer
verified

Table 22-14 Amy, Beth, and Connie are on a hiring committee. They have interviewed 3 candidates identified by their last names and are going to vote on which one is hired. ' -Refer to Table 22-14. What would the results of a Borda Count vote be?

Correct Answer
verified

Correct Answer
verified

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 $4 million, the median voter would vote for

Correct Answer
verified

When some people are better informed than others and the imbalance affects the choices they make, economists say there is

Correct Answer
verified
asymmetric...
View Answer

In corporations, a principal-agent problem can arise when

Correct Answer
verified

Exam 22: Frontiers in Microeconomics

Which of the following is an example of screening?

Correct AnswerverifiedShow Answer

Severe adverse-selection problems may result in

Correct AnswerverifiedShow Answer

​The median voter theorem states that

Correct AnswerverifiedShow Answer

Which of the following would violate transitivity?

Correct AnswerverifiedShow Answer

​Which of the following frontier areas of microeconomics applies economic tools to the study of government (or public) choice?

Correct AnswerverifiedShow Answer

If individuals behave irrationally in some circumstances, why do economists typically assume that they behave rationally?​

Correct AnswerverifiedShow Answer

An action taken by an informed party to reveal private information to an uninformed party is called

Correct AnswerverifiedShow Answer

According to one survey 76 percent of Americans said they were not saving enough for retirement. This example of inconsistency over time

Correct AnswerverifiedShow Answer

An insurance company that writes automobile policies tries to separate safe drivers from risky drivers by offering policies that feature different deductibles and different premiums. This practice is best described as an example of

Correct AnswerverifiedShow Answer

The moral-hazard problem and the desire of firms to lessen that problem serve as a plausible explanation for a firm paying above-equilibrium wages to its workers.

Correct AnswerverifiedShow Answer

Economist Kenneth Arrow wrote a famous book in 1951 in which he took up the question,

Correct AnswerverifiedShow Answer

Table 22-17 -Refer to Table 22-17. The table shows the preferences for three types of voters over three possible outcomes: A, B, and C. The table also shows the percentage of voters of each type. Based on this information, which of the following statements is true?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Arrow's impossibility theorem states that the majority rule fails to produce transitive preferences for society.

Correct AnswerverifiedShow Answer

Which of the following is not a common response to the moral hazard problem that employers face?

Correct AnswerverifiedShow Answer

Table 22-14 Amy, Beth, and Connie are on a hiring committee. They have interviewed 3 candidates identified by their last names and are going to vote on which one is hired. ' -Refer to Table 22-14. What would the results of a Borda Count vote be?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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 $4 million, the median voter would vote for

Correct AnswerverifiedShow Answer

When some people are better informed than others and the imbalance affects the choices they make, economists say there is

Correct Answerverifiedasymmetric...View AnswerShow Answer

In corporations, a principal-agent problem can arise when

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

The median voter theorem states that

Correct Answer
verified

Correct Answer
verified

Which of the following frontier areas of microeconomics applies economic tools to the study of government (or public) choice?

Correct Answer
verified

If individuals behave irrationally in some circumstances, why do economists typically assume that they behave rationally?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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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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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asymmetric...
View Answer

Correct Answer
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