Question 1

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.If the first vote pits a 2-way stop against a stoplight and the second vote pits a 4-way stop against the winner of the first vote,then the outcome is as follows:

Accepted Answer

A)   2-way stop wins the first vote and 2-way stop wins the second vote,so the town installs a 2-way stop.
B)   2-way stop wins the first vote and 4-way stop wins the second vote,so the town installs a 4-way stop.
C)   Stoplight wins the first vote and stoplight wins the second vote,so the town installs a stoplight.
D)   Stoplight wins the first vote and 4-way stop wins the second vote,so the town installs a 4-way stop.E) A) and B)
F) None of the above

Question 2

An implication of the median voter theorem is that,in a race between Republicans and Democrats,

Accepted Answer

A)   if Republicans want to win,they will take a "middle-of-the-road" stance on many issues.
B)   if Democrats want to win,they will take an extreme stance on many issues.
C)   Republicans and Democrats go to extremes to differentiate themselves from one another.
D)   Republicans and Democrats work hard to identify the fringe voters.E) A) and D)
F) A) and B)

Question 3

Scenario 22-2
A wireless telephone service provider offers three service plans to its consumers.
 
-Refer to Scenario 22-2.By offering consumers these choices,the wireless telephone provider is

Accepted Answer

A)   signaling to customers that they offer great customer service.
B)   screening customers to reveal how much they plan to use the service.
C)   creating asymmetric information because only the firm knows the true cost of the service.
D)   engaging in a principal-agent problemE) A) and B)
F) B) and D)

Question 4

Which of the following is not 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 dealer knows more about the true condition of the car than does the potential buyer.
D)   All of the above are examples of asymmetric information.E) None of the above
F) C) and D)

Question 5

Which of the following relationships involves asymmetric information?

Accepted Answer

A)   Patients can look up information regarding certain prescription drugs giving them the same information as their doctors.
B)   Consumer Reports allows customers of DVD players to know as much about the quality of various players as the store salesperson.
C)   Car Fax allows car buyers to obtain used-vehicle histories providing them with the same information as the dealership salesperson.
D)   The batter in a baseball game must guess whether the pitcher is going to throw a fastball,curveball,or change-up.E) A) and B)
F) None of the above

Question 6

Conventional economic theory suggests that in the ultimatum game,the player proposing a split of $50 will propose that she get $49 and that the other player get $1.By the same reasoning,if the amount to be split is $1000,the player proposing the split will propose that she gets

Accepted Answer

A)   $500 and that the other player gets $500.
B)   $998 and that the other player gets $2.
C)   $999 and that the other player gets $1.
D)   $1000 and that the other player gets nothing.E) All of the above
F) B) and D)

Question 7

Recent developments in political economy

Accepted Answer

A)   render much of the traditional field of political science obsolete.
B)   render much of the traditional field of economics obsolete.
C)   illustrate the resolute nature of democracy.
D)   point to the fact that government is a less-than-perfect institution.E) A) and B)
F) A) and C)

Question 8

The median-voter theorem explains why

Accepted Answer

A)   politicians take extreme stands on issues.
B)   voters are attracted to political outsiders.
C)   two opposing politicians tend to take opposite sides of each issues.
D)   politicians tend to take middle-of-the-road positions.E) A) and B)
F) A) and C)

Question 9

Suppose that an economics professor selects two students,Byron and Regina,to participate in a classroom experiment.The professor gives Byron ten $1 bills.Byron must pick an allocation of the ten $1 bills to offer to Regina.If Regina accepts the allocation,each student keeps his or her portion of the money.If Regina rejects the allocation,the professor keeps the $10,and each student receives nothing.Byron selects $9 for himself and $1 for Regina.Based on the studies of human decision making,which of the following statements is correct?

Accepted Answer

A)   If Regina accepts the offer,she is behaving rationally.
B)   If Regina rejects the offer,she may value fairness more than $1.
C)   If Regina rejects the offer,Byron made a bad choice by trying to keep $9 for himself.
D)   Any of the above could be correct.E) A) and D)
F) B) and C)

Question 10

Table 22-10
Three family members -- Seamus,Maeve,and Siobhan -- are deciding what type of movie to attend.The three choices are an action adventure,comedy,or horror.The first,second,and third choices for each person are as indicated in the table below.
 
-Refer to Table 22-10.If the voting method is a Borda count,which alternative will be chosen?

Accepted Answer

A)   Comedy
B)   Action
C)   Horror
D)   None of the above is correct;a Borda count fails to produce a winner in this instance.E) B) and D)
F) A) and B)

Question 11

Table 22-8
 
-Refer to Table 22-8.The table shows the preferences of four types of voters over four possible outcomes: A,B,C,D.In addition,the table shows the percentage of voters of each type.Based on this information,which of the following statements is false?

Accepted Answer

A)   Outcome D is preferred to outcome C overall.
B)   Outcome C is preferred to outcome B overall.
C)   Outcome B is preferred to outcome D overall.
D)   Outcome D is preferred to outcome A overall.E) B) and C)
F) A) and D)

Question 12

Screening occurs when

Accepted Answer

A)   an informed party acts to reveal his private information.
B)   an informed party acts to conceal his private information.
C)   an uninformed party acts to induce the informed party to reveal private information.
D)   one informed party acts to prevent another informed party from revealing private information.E) A) and B)
F) A) and C)

Question 13

Table 22-11
The following table shows the preferences of four types of voters over four possible alternatives as well as the percentage of the electorate with the given preferences.
 
-Refer to Table 22-11.Suppose voters first choose in a majority vote between W and X.Second,voters choose in a majority vote between the winner of the first vote and Y.Third,voters choose in a majority vote between the winner of the second vote and Z.Which alternative will win?

Accepted Answer

A)   W
B)   X
C)   Y
D)   ZE) None of the above
F) A) and B)

Question 14

Studies of human decision making have found that people are reluctant to change their minds.

Accepted Answer

A) True 
 B)False

Question 15

When a corporation decides to include its own corporate stock as part of the compensation for its employees,it is trying to solve the

Accepted Answer

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

Question 16

An example of signaling is a boyfriend giving an expensive,romantic gift to his girlfriend to convey his love for her.

Accepted Answer

A) True 
 B)False

Question 17

The median voter

Accepted Answer

A)   is the voter exactly in the middle of the distribution.
B)   is the voter whose preferred outcome beats any other proposal in a two-way race.
C)   always has more than half the votes on his side in a two-way race.
D)   All of the above are correct.E) C) and D)
F) All of the above

Question 18

What insight into human behavior do economist learn from observing people playing the ultimatum game?

Accepted Answer

People car...

Question 19

According to the median voter theorem,majority rule will produce an outcome that is inconsistent with transitive preferences.

Accepted Answer

A) True 
 B)False

Question 20

If you are assigned the role of Player A in the Ultimatum game and you propose that player B gets $1 and you get $99

Accepted Answer

A)   you are behaving as a rational wealth-maximizer and player B is likely to accept your offer.
B)   you are behaving as a rational wealth-maximizer and player B is likely to reject your offer.
C)   you are not behaving as a rational wealth-maximizer and player B is likely to accept your offer.
D)   you are not behaving as a rational wealth-maximizer and player B is likely to reject your offer.E) A) and D)
F) All of the above

Exam 22: Frontiers of Microeconomics

An example of signaling is a boyfriend giving an expensive,romantic gift to his girlfriend to convey his love for her.

Correct Answer
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Screening occurs when

Correct Answer
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When a corporation decides to include its own corporate stock as part of the compensation for its employees,it is trying to solve the

Correct Answer
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Scenario 22-2 A wireless telephone service provider offers three service plans to its consumers. -Refer to Scenario 22-2.By offering consumers these choices,the wireless telephone provider is

Correct Answer
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Recent developments in political economy

Correct Answer
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What insight into human behavior do economist learn from observing people playing the ultimatum game?

Correct Answer
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People car...
View Answer

Correct Answer
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An implication of the median voter theorem is that,in a race between Republicans and Democrats,

Correct Answer
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Which of the following relationships involves asymmetric information?

Correct Answer
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Correct Answer
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The median-voter theorem explains why

Correct Answer
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Conventional economic theory suggests that in the ultimatum game,the player proposing a split of $50 will propose that she get $49 and that the other player get $1.By the same reasoning,if the amount to be split is $1000,the player proposing the split will propose that she gets

Correct Answer
verified

Correct Answer
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Table 22-8 -Refer to Table 22-8.The table shows the preferences of four types of voters over four possible outcomes: A,B,C,D.In addition,the table shows the percentage of voters of each type.Based on this information,which of the following statements is false?

Correct Answer
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Correct Answer
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Studies of human decision making have found that people are reluctant to change their minds.

Correct Answer
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Which of the following is not an example of asymmetric information?

Correct Answer
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According to the median voter theorem,majority rule will produce an outcome that is inconsistent with transitive preferences.

Correct Answer
verified

If you are assigned the role of Player A in the Ultimatum game and you propose that player B gets $1 and you get $99

Correct Answer
verified

The median voter

Correct Answer
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Exam 22: Frontiers of Microeconomics

An example of signaling is a boyfriend giving an expensive,romantic gift to his girlfriend to convey his love for her.

Correct AnswerverifiedShow Answer

Screening occurs when

Correct AnswerverifiedShow Answer

When a corporation decides to include its own corporate stock as part of the compensation for its employees,it is trying to solve the

Correct AnswerverifiedShow Answer

Scenario 22-2 A wireless telephone service provider offers three service plans to its consumers. -Refer to Scenario 22-2.By offering consumers these choices,the wireless telephone provider is

Correct AnswerverifiedShow Answer

Recent developments in political economy

Correct AnswerverifiedShow Answer

What insight into human behavior do economist learn from observing people playing the ultimatum game?

Correct AnswerverifiedPeople car...View AnswerShow Answer

Correct AnswerverifiedShow Answer

An implication of the median voter theorem is that,in a race between Republicans and Democrats,

Correct AnswerverifiedShow Answer

Which of the following relationships involves asymmetric information?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The median-voter theorem explains why

Correct AnswerverifiedShow Answer

Conventional economic theory suggests that in the ultimatum game,the player proposing a split of $50 will propose that she get $49 and that the other player get $1.By the same reasoning,if the amount to be split is $1000,the player proposing the split will propose that she gets

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 22-8 -Refer to Table 22-8.The table shows the preferences of four types of voters over four possible outcomes: A,B,C,D.In addition,the table shows the percentage of voters of each type.Based on this information,which of the following statements is false?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Studies of human decision making have found that people are reluctant to change their minds.

Correct AnswerverifiedShow Answer

Which of the following is not an example of asymmetric information?

Correct AnswerverifiedShow Answer

According to the median voter theorem,majority rule will produce an outcome that is inconsistent with transitive preferences.

Correct AnswerverifiedShow Answer

If you are assigned the role of Player A in the Ultimatum game and you propose that player B gets $1 and you get $99

Correct AnswerverifiedShow Answer

The median voter

Correct AnswerverifiedShow Answer

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People car...
View Answer

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