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Exam 22: Frontiers in Microeconomics

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Question 91

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People tend to wait until deadlines get close to work on projects in part because they believe that they can complete the projects in less time than it will actually take. Which findings from behavioral economics is this observation consistent with?

A) People tend to be time inconsistent and people tend to be overconfident.
B) People tend to be time inconsistent but not that people tend to be overconfident.
C) People tend to be overconfident, but not that people tend to be time inconsistent.
D) Neither that people tend to be overconfident nor that people tend to be time inconsistent.

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

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Question 92

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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. If there is a vote on whether to spend $800 per person or $1,200 per person, the median voter will vote to spend

A) $800 per person and the voting outcome will be $800 per person.
B) $800 per person and the voting outcome will be $1200 per person.
C) $1200 per person and the voting outcome will be $800 per person.
D) $1200 per person and the voting outcome will be $1200 per person.

E) B) and D)
F) None of the above

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Question 93

Multiple Choice

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​A car mechanic knowing more about what's wrong with your vehicle than you do is best explained by which of the following concepts:

Assume there are nine voters in a certain small town and let x = the preferred number of dollars spent per person per month on garbage collection. For Voters 1, 2, and 3, x = $10; for Voter 4, x = $15; for Voter 5, x = $18; and for Voters 6, 7, 8 and 9, x = $20. Based on these preferences, which of these dollar amounts will win over any one of the others?

Table 22-8 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 22-8. If the town administrator first asks the citizens to vote for hockey or basketball and then asks them to choose between the winner of the first vote and football, what will be the outcome?

Researchers have found that the systematic mistakes that people make in their decision making include a lack of confidence in their own abilities.

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

Asymmetric information

Asymmetric information, political economy, and behavioral economics

Advocates of a tax on soda and other sugary drinks argue that such a tax

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

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. Below are lists of results for two separate elections between two candidates. In which case are both results correct?

Which of the following is not correct?

Table 22-20 The table below shows the preferred city budget (in millions) for in the city of Springfield. -Refer to Table 22-20. In an election, each voter will select the budget closest to his or her most preferred budget. In which of the following cases does a budget of $22 win?

Economic theory assumes that voters, politicians, and other political participants are largely motivated by

Table 22-24 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 22-24. 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?

The suggestion that people are "satisficers" is similar to the view that people

Robert and Neal are playing the ultimatum game, starting with $100. Based on the coin toss, Robert is the player to propose a division of the $100. If Robert acts as economic theory assumes and Neal acts as experimental evidence shows, Neal will

Suppose a community is debating how much money to spend on improvements to the high school. The members of the community who have children advocate spending $20 million to make improvements. The remaining 60% of the community thinks the high school is just fine and does not want to spend anything. What will the outcome be?

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