Question 1

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 2

Asymmetric information

Accepted Answer

A)  is not an area of current research in economics.
B)  can take the form of a hidden action or a hidden characteristic.
C)  explains Arrow's impossibility theorem.
D)  is uncommon in corporate management.E) B) and C)
F) C) and D)

Question 3

Table 22-1
Three friends-Stephanie, Stella, and Lydia-are deciding where to go together for vacation. They all agree that they should go to one of the three places: Italy, Spain, or Hawaii. They also agree that they will have two pairwise votes to determine where to go on vacation, with the majority determining the outcome on each vote. The first, second, and third choices for each person are as indicated in the following table.
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   Stephanie  Stella  Lydia  First choice  Italy  Spain  Hawaii  Second choice  Spain  Hawaii  Italy  Third choice  Hawaii  Italy  Spain \begin{array} { | c | c | c | c | } \hline & 	ext { Stephanie } & 	ext { Stella } & 	ext { Lydia } \\hline 	ext { First choice } & 	ext { Italy } & 	ext { Spain } & 	ext { Hawaii } \\hline 	ext { Second choice } & 	ext { Spain } & 	ext { Hawaii } & 	ext { Italy } \\hline 	ext { Third choice } & 	ext { Hawaii } & 	ext { Italy } & 	ext { Spain } \\hline\end{array} First choice  Second choice  Third choice ​ Stephanie  Italy  Spain  Hawaii ​ Stella  Spain  Hawaii  Italy ​ Lydia  Hawaii  Italy  Spain ​​ 
-Refer to Table 22-1. If the first vote pits Italy against Spain and the second vote pits Hawaii against the winner of the first vote, then the outcome is as follows:

Accepted Answer

A)  Italy wins the first vote and Hawaii wins the second vote, so they go to Hawaii.
B)  Italy wins the first vote and Italy wins the second vote, so they go to Italy.
C)  Spain wins the first vote and Spain wins the second vote, so they go to Spain.
D)  Spain wins the first vote and Hawaii wins the second vote, so they go to Hawaii. E) None of the above
F) C) and D)

Question 4

Table 22-8
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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 asks voters to choose first between basketball and football and then between the winner of the first vote and hockey, which sport will win the final vote?

Accepted Answer

The answer of Table 22-8
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The citizens of Mayville are having...

Question 5

An example of an information asymmetry is when a worker knows more than his employer about his work effort.

Accepted Answer

A) True 
 B)False

Exam 22: Frontiers in Microeconomics

An example of an information asymmetry is when a worker knows more than his employer about his work effort.

Correct Answer
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Correct Answer
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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
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Correct Answer
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Exam 22: Frontiers in Microeconomics

An example of an information asymmetry is when a worker knows more than his employer about his work effort.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Asymmetric information

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

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Correct AnswerverifiedShow Answer

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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