A. people give too much weight to a small number of vivid observations
B. People are sometimes too sure of their own abilities
C. All of these answers are actually true statements about how people make decisions.
D. People are always rational maximizers
E. People are reluctant to change their minds in the face of new information
Asymmetric Information
Nicole wants to avoid buying a car that is a lemon. She takes a car she would like to buy to her mechanic before she purchases it. This is known as ?
A. screening
B. signaling
C. moral hazard
D. adverse selection
Which of the following is a response to People’s inconsistent behavior over time ?
A. all of these answers
B. forced contributions to a retirement plan
C. year-end bonuses
D. efficiency wages
Jamil’s friend dies of a sudden heart attack. Jamil rushes to his doctor for an expensive physical examination. This response demonstrates that ?
A. People give too much weight to a small number of vivid observations
B. People easily change their minds when confronted with new information
C. People enjoy going to the doctor
D. People tend to plan ahead and follow through on their plans
Markus is a travelling salesman for an apparel company. In this employment relationship, Markus is the ?
A. agent
B. principle
C. screener
D. signaler
hich of the following is not a property required of a perfect voting system ?
A. The median voter always wins
B. no dictators
C. independence of irrelevant
D. transitivity
In the ultimatum game, what split would be rational for both the person proposing the split and the person who must accept or reject the split ?
A. There is no rational solution
B. 75/25
C. 99/1
D. 1/99
E. 50/50
A life insurance company forces Enzo to have a medical examination prior to selling him insurance ?
A. transitivity
B. impossibility
C. independence
D. unanimity
Which of the following is not a method firms use to avoid the moral hazard problem in the employment relationship ?
A. They pay employees with delayed compensation such as a year-end bonus
B. They buy life insurance on their workers
C. They pay above equilibrium wages
D. They put hidden video cameras in the workplace
Suppose that 40 percent of the voting population wish to spent Rs1,000 for artwork in City Hall, 25 percent wish to spent Rs20,000 and 35 percent wish to spend Rs 22,000 What is the median preferred outcome, the average preferred outcome and the modal preferred outcome ?
A. Rs20,000; Rs20,000; Rs22,000
B. Rs1,000; Rs14,333; Rs1,000
C. Rs20,000; Rs13,100; Rs1,000
D. Rs1,000; Rs20,000; Rs22,000
