Question 1

Figure 19.2.1
-Refer to Figure 19.2.1 above. Due to the perceived fairness of price increases during a snow storm, the demand curve:

Accepted Answer

A)  is very elastic at prices above $25. 
B)  is very inelastic at prices above $25. 
C)  is elastic for price decreases but inelastic for price increases. 
D)  is inelastic throughout its entire range. 
A)  is very elastic at prices above $25. 
B)  is very inelastic at prices above $25. 
C)  is elastic for price decreases but inelastic for price increases. 
D)  is inelastic throughout its entire range. A

Question 2

In understanding the concept of anchoring, which two factors play an essential role?

Accepted Answer

A)  Price and quantity of equilibrium 
B)  Income and preferences 
C)  Utility maximization and the budget constraint 
D)  The context and the information available 
A)  Price and quantity of equilibrium 
B)  Income and preferences 
C)  Utility maximization and the budget constraint 
D)  The context and the information available D

Question 3

In the efficiency wage theory of labor, an increase in wages is justified by a resulting:

Accepted Answer

A)  increase in the workers' standard of living. 
B)  increase in the attractiveness of the work environment. 
C)  increase in productivity and the desire to work harder. 
D)  all of the above. 
A)  increase in the workers' standard of living. 
B)  increase in the attractiveness of the work environment. 
C)  increase in productivity and the desire to work harder. 
D)  all of the above. C

Question 4

The natural human tendency to underestimate the likelihood of a catastrophic medical emergency is a case of:

Accepted Answer

A)  overconfidence. 
B)  over-optimism. 
C)  over-precision. 
D)  overcorrection. 
A)  overconfidence. 
B)  over-optimism. 
C)  over-precision. 
D)  overcorrection.

Question 5

Which of the following is more important in sending a signal of the value of a good to consumers?

Accepted Answer

A)  To inform consumers of the many features a good offers 
B)  To send a consistent message as a signal 
C)  To ensure that the signal is credible 
D)  To ensure that the signal reaches as many consumers.as possible 
A)  To inform consumers of the many features a good offers 
B)  To send a consistent message as a signal 
C)  To ensure that the signal is credible 
D)  To ensure that the signal reaches as many consumers.as possible

Question 6

Figure 19.2.1
-Refer to Figure 19.2.1 above. The price level of $40 illustrates the fact that:

Accepted Answer

A)  the price of a shovel increases to $40 during a snow storm. 
B)  $40 is an unfair price for shovels, so no consumer would ever pay that amount. 
C)  some consumers are willing to pay as much as $40 for a shovel, even in the absence of a snow storm. 
D)  all of the above are true. 
A)  the price of a shovel increases to $40 during a snow storm. 
B)  $40 is an unfair price for shovels, so no consumer would ever pay that amount. 
C)  some consumers are willing to pay as much as $40 for a shovel, even in the absence of a snow storm. 
D)  all of the above are true.

Question 7

Figure 19.2.1
-Refer to Figure 19.2.1 above. Consumers would not buy a shovel when they perceive price gauging. Which demand or portion of a demand curve best reflects that statement?

Accepted Answer

A)  The demand curve D1 
B)  The dashed portion of demand curve D2 
C)  The flat portion of demand curve D2 
D)  The steep, solid portion of D2 
A)  The demand curve D1 
B)  The dashed portion of demand curve D2 
C)  The flat portion of demand curve D2 
D)  The steep, solid portion of D2

Question 8

In real terms, housing prices after the burst of the housing bubble fell on average by:

Accepted Answer

A)  10% 
B)  20% 
C)  40% 
D)  50% 
A)  10% 
B)  20% 
C)  40% 
D)  50%

Question 9

It is possible to reduce emissions without intervention, only if:

Accepted Answer

A)  the cost of emissions abatement would decrease. 
B)  the marginal cost of abatement is greater than the marginal benefit. 
C)  consumers were properly informed and incentivized. 
D)  producers would act in their own self-interest and produce the private market level of output. 
A)  the cost of emissions abatement would decrease. 
B)  the marginal cost of abatement is greater than the marginal benefit. 
C)  consumers were properly informed and incentivized. 
D)  producers would act in their own self-interest and produce the private market level of output.

Question 10

When the probability of an event is very, very small, individuals tend to:

Accepted Answer

A)  give a disproportionately large weight to its probability of occurring. 
B)  ignore that possibility in their decision making. 
C)  hesitate between assigning a large or a small likelihood that it will happen to them. 
D)  take unnecessary risks. 
A)  give a disproportionately large weight to its probability of occurring. 
B)  ignore that possibility in their decision making. 
C)  hesitate between assigning a large or a small likelihood that it will happen to them. 
D)  take unnecessary risks.

Question 11

After the bubble in housing prices in 2008 burst, we learned that:

Accepted Answer

A)  a bubble can be harmless in the sense that while people lose money, there is no lasting damage to the overall economy. 
B)  consumers usually loose, but large banks remain largely unharmed. 
C)  consumers face foreclosures and large banks face bankruptcy. 
D)  large banks must be bailed out, but households are usually not harmed. 
A)  a bubble can be harmless in the sense that while people lose money, there is no lasting damage to the overall economy. 
B)  consumers usually loose, but large banks remain largely unharmed. 
C)  consumers face foreclosures and large banks face bankruptcy. 
D)  large banks must be bailed out, but households are usually not harmed.

Question 12

Figure 19.5.1
-Refer to Figure 19.5.1 above. If unregulated, the industry will produce:

Accepted Answer

A)  Q1. 
B)  Q2. 
C)  Q3. 
D)  Somewhere between Q1 and Q3. 
A)  Q1. 
B)  Q2. 
C)  Q3. 
D)  Somewhere between Q1 and Q3.

Question 13

In the classroom experiment where a mug is bought and sold,

Accepted Answer

A)  acquiring the mug was perceived to be a greater "gain" for those who acquired it than the "loss" for those who gave it up. 
B)  giving up the mug was perceived to be a greater "loss" to those who had one than the "gain" from obtaining a mug for those without one. 
C)  the price at which the mug was exchanged compensated precisely the value gained and lost by the traders. 
D)  the price at which the mug could be sold was always less than the price at which the mug was acquired. 
A)  acquiring the mug was perceived to be a greater "gain" for those who acquired it than the "loss" for those who gave it up. 
B)  giving up the mug was perceived to be a greater "loss" to those who had one than the "gain" from obtaining a mug for those without one. 
C)  the price at which the mug was exchanged compensated precisely the value gained and lost by the traders. 
D)  the price at which the mug could be sold was always less than the price at which the mug was acquired.

Question 14

Figure 19.5.2
-Refer to Figure 19.5.2 above. Once consumers and firms develop awareness of the benefits of reducing energy consumption,

Accepted Answer

A)  a tax on emissions is no longer necessary. 
B)  a tax on emissions is still necessary but it would be lower than before. 
C)  a tax on emissions needs to be larger to obtain the socially optimal level of industry output. 
D)  taxes should turn to subsidies. 
A)  a tax on emissions is no longer necessary. 
B)  a tax on emissions is still necessary but it would be lower than before. 
C)  a tax on emissions needs to be larger to obtain the socially optimal level of industry output. 
D)  taxes should turn to subsidies.

Question 15

Which of the following statements best describe the textbook narrative on moral persuasion?

Accepted Answer

A)  Moral persuasion is one way to reduce energy consumption, but such thing it is not utility maximizing. 
B)  Moral persuasion could reduce energy consumption and could enter in people's utility functions. 
C)  Highlighting the inherent moral obligation to save the environment has been demonstrated to have a weak effect on the reduction of energy consumption. 
D)  It is difficult to quantify the reduction in energy consumption caused by a raising of moral obligation. 
A)  Moral persuasion is one way to reduce energy consumption, but such thing it is not utility maximizing. 
B)  Moral persuasion could reduce energy consumption and could enter in people's utility functions. 
C)  Highlighting the inherent moral obligation to save the environment has been demonstrated to have a weak effect on the reduction of energy consumption. 
D)  It is difficult to quantify the reduction in energy consumption caused by a raising of moral obligation.

Question 16

Figure 19.2.1
-Refer to Figure 19.2.1 above. During a snow storm,

Accepted Answer

A)  the price of shovels and the quantity demanded increase. 
B)  the price of shovels increases, but the quantity sold remains at its initial level, Q1. 
C)  the quantity of shovels increases, but the price remains at $20. 
D)  the price of shovels settles at $40 and the quantity demanded decreases. 
A)  the price of shovels and the quantity demanded increase. 
B)  the price of shovels increases, but the quantity sold remains at its initial level, Q1. 
C)  the quantity of shovels increases, but the price remains at $20. 
D)  the price of shovels settles at $40 and the quantity demanded decreases.

Question 17

In the efficiency wage theory,

Accepted Answer

A)  fairness directly affects worker productivity. 
B)  fairness concerns do not apply. 
C)  fairness has a mixed influence on productivity. 
D)  fairness and wage increases depend on the level of employment. 
A)  fairness directly affects worker productivity. 
B)  fairness concerns do not apply. 
C)  fairness has a mixed influence on productivity. 
D)  fairness and wage increases depend on the level of employment.

Question 18

Figure 19.2.1
-Refer to Figure 19.2.1 above. Consumers understand why the price of shovels would increase somewhat during a snow storm and would be willing to buy at higher prices. Which demand or portion of a demand curve best reflects that statement?

Accepted Answer

A)  The demand curve D1 
B)  The flat portion of demand curve D2 
C)  The dashed portion of demand curve D2 
D)  The steep, solid portion of D2 
A)  The demand curve D1 
B)  The flat portion of demand curve D2 
C)  The dashed portion of demand curve D2 
D)  The steep, solid portion of D2

Question 19

In the experiment that observes how people become less prone to violate a local ordinance on littering, the factor that changed their behavior was, predominantly:

Accepted Answer

A)  the imposition of a strong financial disincentives. 
B)  the warnings issued by law enforcement about their activities. 
C)  a raising of public conscience about the effects of littering. 
D)  the potential benefits of littering. 
A)  the imposition of a strong financial disincentives. 
B)  the warnings issued by law enforcement about their activities. 
C)  a raising of public conscience about the effects of littering. 
D)  the potential benefits of littering.

Question 20

To estimate the expected return on equity investments:

Accepted Answer

A)  it is necessary to look only at recent data on stock returns. 
B)  one needs to look only at expected returns on debt instruments. 
C)  would require a study of stock market returns for many decades. 
D)  would require only a course in financial economics. 
A)  it is necessary to look only at recent data on stock returns. 
B)  one needs to look only at expected returns on debt instruments. 
C)  would require a study of stock market returns for many decades. 
D)  would require only a course in financial economics.

Figure 19.2.1 -Refer to Figure 19.2.1 above. Due to the perceived fairness of price increases during a snow storm, the demand curve:

In understanding the concept of anchoring, which two factors play an essential role?

In the efficiency wage theory of labor, an increase in wages is justified by a resulting:

The natural human tendency to underestimate the likelihood of a catastrophic medical emergency is a case of:

Which of the following is more important in sending a signal of the value of a good to consumers?

Figure 19.2.1 -Refer to Figure 19.2.1 above. The price level of $40 illustrates the fact that:

Figure 19.2.1 -Refer to Figure 19.2.1 above. Consumers would not buy a shovel when they perceive price gauging. Which demand or portion of a demand curve best reflects that statement?

In real terms, housing prices after the burst of the housing bubble fell on average by:

It is possible to reduce emissions without intervention, only if:

When the probability of an event is very, very small, individuals tend to:

After the bubble in housing prices in 2008 burst, we learned that:

Figure 19.5.1 -Refer to Figure 19.5.1 above. If unregulated, the industry will produce:

In the classroom experiment where a mug is bought and sold,

Figure 19.5.2 -Refer to Figure 19.5.2 above. Once consumers and firms develop awareness of the benefits of reducing energy consumption,

Which of the following statements best describe the textbook narrative on moral persuasion?

Figure 19.2.1 -Refer to Figure 19.2.1 above. During a snow storm,

In the efficiency wage theory,

Figure 19.2.1 -Refer to Figure 19.2.1 above. Consumers understand why the price of shovels would increase somewhat during a snow storm and would be willing to buy at higher prices. Which demand or portion of a demand curve best reflects that statement?

In the experiment that observes how people become less prone to violate a local ordinance on littering, the factor that changed their behavior was, predominantly:

To estimate the expected return on equity investments:

Preliminaries

The Basics of Supply and Demand

Consumer Behavior

Individual and Market Demand

Uncertainty and Consumer Behavior

Production

The Cost of Production

Profit Maximization and Competitive Supply

The Analysis of Competitive Markets

Market Power: Monopoly and Monopsony

Pricing With Market Power

Monopolistic Competition and Oligopoly

Game Theory and Competitive Strategy

Markets for Factor Inputs

Investment, Time, and Capital Markets

General Equilibrium and Economic Efficiency

Markets With Asymmetric Information

Externalities and Public Goods

Filters

Exam 19: Behavioral Economics

Figure 19.2.1 -Refer to Figure 19.2.1 above. Due to the perceived fairness of price increases during a snow storm, the demand curve:

In understanding the concept of anchoring, which two factors play an essential role?

In the efficiency wage theory of labor, an increase in wages is justified by a resulting:

The natural human tendency to underestimate the likelihood of a catastrophic medical emergency is a case of:

Which of the following is more important in sending a signal of the value of a good to consumers?

Figure 19.2.1 -Refer to Figure 19.2.1 above. The price level of $40 illustrates the fact that:

Figure 19.2.1 -Refer to Figure 19.2.1 above. Consumers would not buy a shovel when they perceive price gauging. Which demand or portion of a demand curve best reflects that statement?

In real terms, housing prices after the burst of the housing bubble fell on average by:

It is possible to reduce emissions without intervention, only if:

When the probability of an event is very, very small, individuals tend to:

After the bubble in housing prices in 2008 burst, we learned that:

Figure 19.5.1 -Refer to Figure 19.5.1 above. If unregulated, the industry will produce:

In the classroom experiment where a mug is bought and sold,

Figure 19.5.2 -Refer to Figure 19.5.2 above. Once consumers and firms develop awareness of the benefits of reducing energy consumption,

Which of the following statements best describe the textbook narrative on moral persuasion?

Figure 19.2.1 -Refer to Figure 19.2.1 above. During a snow storm,

In the efficiency wage theory,

Figure 19.2.1 -Refer to Figure 19.2.1 above. Consumers understand why the price of shovels would increase somewhat during a snow storm and would be willing to buy at higher prices. Which demand or portion of a demand curve best reflects that statement?

In the experiment that observes how people become less prone to violate a local ordinance on littering, the factor that changed their behavior was, predominantly:

To estimate the expected return on equity investments:

Preliminaries

The Basics of Supply and Demand

Consumer Behavior

Individual and Market Demand

Uncertainty and Consumer Behavior

Production

The Cost of Production

Profit Maximization and Competitive Supply

The Analysis of Competitive Markets

Market Power: Monopoly and Monopsony

Pricing With Market Power

Monopolistic Competition and Oligopoly

Game Theory and Competitive Strategy

Markets for Factor Inputs

Investment, Time, and Capital Markets

General Equilibrium and Economic Efficiency

Markets With Asymmetric Information

Externalities and Public Goods

Filters