Question 1

Piece rates attract more productive workers.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements is correct?

Accepted Answer

A) Monetary rewards are most effective when they are supported by extrinsic motivation and measures of social
Status. 
B) Monetary rewards are most effective when they are supported by intrinsic motivation and measures of
Personal achievement. 
C) Monetary rewards are most effective when they are supported by extrinsic motivation and measures of
Personal achievement. 
D) Monetary rewards are most effective when they are supported by intrinsic motivation and measures of social
Status. 
A) Monetary rewards are most effective when they are supported by extrinsic motivation and measures of social
Status. 
B) Monetary rewards are most effective when they are supported by intrinsic motivation and measures of
Personal achievement. 
C) Monetary rewards are most effective when they are supported by extrinsic motivation and measures of
Personal achievement. 
D) Monetary rewards are most effective when they are supported by intrinsic motivation and measures of social
Status.

Question 3

difference between a price rate and an hourly rateis:

Accepted Answer

A) a piece rate is a wage for each piece of work completed whereas an hourly rate is a rate for each hour of work
Completed. 
B) a piece rate is only offered for noncontractual workers whereas an hourly rate is only offered for contractual
Workers. 
C) a piece rate is not tied to effort whereas an hourly wage is tied to effort. 
D) None of the answers is correct. 
A) a piece rate is a wage for each piece of work completed whereas an hourly rate is a rate for each hour of work
Completed. 
B) a piece rate is only offered for noncontractual workers whereas an hourly rate is only offered for contractual
Workers. 
C) a piece rate is not tied to effort whereas an hourly wage is tied to effort. 
D) None of the answers is correct.

Question 4

A mutual fund pools money from many customers and investsthe money in many firms. The fees charged by fund managersare:

Accepted Answer

A) lower in bond funds. 
B) higher in passive funds. 
C) lower in passive funds. 
D) higher in bond funds. 
A) lower in bond funds. 
B) higher in passive funds. 
C) lower in passive funds. 
D) higher in bond funds.

Question 5

Bjorn is a lazy worker with low productivity who worksbecause he has to, not because he wants to. Amal is avery productive worker, enjoys what he does, and worksquickly and accurately. Based on this information,which of the following is true?

Accepted Answer

A) The piece rate incentive scheme would be equally appropriate for both these workers. 
B) Bjorn should be offered an hourly wage, whereas Amal should be offered a piece rate.(True Answer
)Correct 
C) Amal should be offered an hourly wage, whereas Bjorn should be offered a piece rate. 
D) The hourly wage incentive scheme would be equally appropriate for both these workers. 
A) The piece rate incentive scheme would be equally appropriate for both these workers. 
B) Bjorn should be offered an hourly wage, whereas Amal should be offered a piece rate.(True Answer
)Correct 
C) Amal should be offered an hourly wage, whereas Bjorn should be offered a piece rate. 
D) The hourly wage incentive scheme would be equally appropriate for both these workers.

Question 6

a firm's owner is better able than the sales staff tobear the risk of a recession, weak incentives:

Accepted Answer

A) are worse than strong incentives. 
B) may be mutually profitable. 
C) should not be used. 
D) would not be profitable. 
A) are worse than strong incentives. 
B) may be mutually profitable. 
C) should not be used. 
D) would not be profitable.

Question 7

An efficient stock market means that:

Accepted Answer

A) it is difficult to outperform the market, since stock prices convey all relevant public information about a company.(True
Answer )Correct 
B) traders with inside information cannot even outperform market averages. 
C) new information is slowly reflected in stock prices. 
D) All of the answers are correct. 
A) it is difficult to outperform the market, since stock prices convey all relevant public information about a company.(True
Answer )Correct 
B) traders with inside information cannot even outperform market averages. 
C) new information is slowly reflected in stock prices. 
D) All of the answers are correct.

Question 8

Which of the following tends to be least risky in its stock valuewhen the economy is in a deep recession?

Accepted Answer

A) an automobile manufacturer 
B) a homebuilder 
C) a high-end department store 
D) a utility company that supplies water to government buildings 
A) an automobile manufacturer 
B) a homebuilder 
C) a high-end department store 
D) a utility company that supplies water to government buildings

Question 9

At the consumer's optimal consumption bundle, the MRSXY is 4, and the marginal utility of Good X is 8. What is the marginalutility of Good Y?

Accepted Answer

A) 1/2 
B) 2 
C) 24 
D) 16 
A) 1/2 
B) 2 
C) 24 
D) 16

Question 10

Stocks are a good investment if:
I. one is prepared to hold them for a while through marketfluctuations
II.one can buy them immediately after prices have fallen
III. one is not averse to risk.

Accepted Answer

A) I only 
B) I and II only 
C) I and III only 
D) I, II, and III 
A) I only 
B) I and II only 
C) I and III only 
D) I, II, and III

Question 11

using a piece rate system:

Accepted Answer

A) it is important to measure and observe worker quality. 
B) a firm may attract more unproductive workers. 
C) a firm will experience a decrease in output. 
D) All of the answers are correct. 
A) it is important to measure and observe worker quality. 
B) a firm may attract more unproductive workers. 
C) a firm will experience a decrease in output. 
D) All of the answers are correct.

Question 12

Which of the following would reduce ability risk intournaments?

Accepted Answer

A) excluding players with low ability from contesting in tournaments 
B) creating strong incentive for effort in tournaments 
C) enhancing the rewards for players in tournaments 
D) structuring tournaments so that rewards are closely tied to effort 
A) excluding players with low ability from contesting in tournaments 
B) creating strong incentive for effort in tournaments 
C) enhancing the rewards for players in tournaments 
D) structuring tournaments so that rewards are closely tied to effort

Question 13

If the marginal utility per dollar for hamburgers is higher thanthe marginal utility per dollar for Tacos, then in order tomaximize utility the consumer should only consumehamburgers.

Accepted Answer

A) True 
 B)False

Question 14

Tournaments tie rewards more closely to actions thatan agent controls, thereby improving productivity andpay.

Accepted Answer

A) True 
 B)False

Question 15

Monetary rewards are not effective when they aresupported by intrinsic motivation and measures ofsocial status.

Accepted Answer

A) True 
 B)False

Question 16

A tournament increases the amount of risk from theexternal environment.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements is TRUE?
I. The riskiest stocks tend to move in sync with the economy
II.A relatively safe stock is one that does not vary much withthe state of the economy
III. Health care stocks are some of the riskiest stocks.

Accepted Answer

A) III only 
B) I and II only 
C) II and III only 
D) I only 
A) III only 
B) I and II only 
C) II and III only 
D) I only

Question 18

and Bill Gates are junior executives of a softwarecompany. If both of you are in a tournament vying forpromotion to CEO, there is likely to be substantial:

Accepted Answer

A) ability risk. 
B) effort on your part to get promoted. 
C) effort on Bill Gates's part to get promoted. 
D) All the answers are correct. 
A) ability risk. 
B) effort on your part to get promoted. 
C) effort on Bill Gates's part to get promoted. 
D) All the answers are correct.

Piece rates attract more productive workers.

Which of the following statements is correct?

difference between a price rate and an hourly rateis:

A mutual fund pools money from many customers and investsthe money in many firms. The fees charged by fund managersare:

Bjorn is a lazy worker with low productivity who worksbecause he has to, not because he wants to. Amal is avery productive worker, enjoys what he does, and worksquickly and accurately. Based on this information,which of the following is true?

a firm's owner is better able than the sales staff tobear the risk of a recession, weak incentives:

An efficient stock market means that:

Which of the following tends to be least risky in its stock valuewhen the economy is in a deep recession?

At the consumer's optimal consumption bundle, the MRSXY is 4, and the marginal utility of Good X is 8. What is the marginalutility of Good Y?

Stocks are a good investment if: I. one is prepared to hold them for a while through marketfluctuations II.one can buy them immediately after prices have fallen III. one is not averse to risk.

using a piece rate system:

Which of the following would reduce ability risk intournaments?

If the marginal utility per dollar for hamburgers is higher thanthe marginal utility per dollar for Tacos, then in order tomaximize utility the consumer should only consumehamburgers.

Tournaments tie rewards more closely to actions thatan agent controls, thereby improving productivity andpay.

Monetary rewards are not effective when they aresupported by intrinsic motivation and measures ofsocial status.

A tournament increases the amount of risk from theexternal environment.

Which of the following statements is TRUE? I. The riskiest stocks tend to move in sync with the economy II.A relatively safe stock is one that does not vary much withthe state of the economy III. Health care stocks are some of the riskiest stocks.

and Bill Gates are junior executives of a softwarecompany. If both of you are in a tournament vying forpromotion to CEO, there is likely to be substantial:

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

Elasticity

Consumer Choices

Production, Costs, and Industry Structure

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Labor Markets and Income

Poverty and Economic Inequality

Information, Risk, and Insurance

Financial Markets

Public Economy

International Trade

Globalization and Protectionism

Filters

Exam 21: Consumer Utility and Optimization

Piece rates attract more productive workers.

Which of the following statements is correct?

difference between a price rate and an hourly rateis:

A mutual fund pools money from many customers and investsthe money in many firms. The fees charged by fund managersare:

Bjorn is a lazy worker with low productivity who worksbecause he has to, not because he wants to. Amal is avery productive worker, enjoys what he does, and worksquickly and accurately. Based on this information,which of the following is true?

a firm's owner is better able than the sales staff tobear the risk of a recession, weak incentives:

An efficient stock market means that:

Which of the following tends to be least risky in its stock valuewhen the economy is in a deep recession?

At the consumer's optimal consumption bundle, the MRSXY is 4, and the marginal utility of Good X is 8. What is the marginalutility of Good Y?

Stocks are a good investment if: I. one is prepared to hold them for a while through marketfluctuations II.one can buy them immediately after prices have fallen III. one is not averse to risk.

using a piece rate system:

Which of the following would reduce ability risk intournaments?

If the marginal utility per dollar for hamburgers is higher thanthe marginal utility per dollar for Tacos, then in order tomaximize utility the consumer should only consumehamburgers.

Tournaments tie rewards more closely to actions thatan agent controls, thereby improving productivity andpay.

Monetary rewards are not effective when they aresupported by intrinsic motivation and measures ofsocial status.

A tournament increases the amount of risk from theexternal environment.

Which of the following statements is TRUE? I. The riskiest stocks tend to move in sync with the economy II.A relatively safe stock is one that does not vary much withthe state of the economy III. Health care stocks are some of the riskiest stocks.

and Bill Gates are junior executives of a softwarecompany. If both of you are in a tournament vying forpromotion to CEO, there is likely to be substantial:

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

Elasticity

Consumer Choices

Production, Costs, and Industry Structure

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Labor Markets and Income

Poverty and Economic Inequality

Information, Risk, and Insurance

Financial Markets

Public Economy

International Trade

Globalization and Protectionism

Filters