Question 1

incentive to cut costs is ________ for ________prisons (as/than) it is for ________ prisons.

Accepted Answer

A) about the same; private; public 
B) smaller; private; public 
C) greater; private; public 
D) greater; public; private 
A) about the same; private; public 
B) smaller; private; public 
C) greater; private; public 
D) greater; public; private

Question 2

usual argument against government bureaucracy isthat:

Accepted Answer

A) with budget constraints public bureaucracies won't have an incentive to maintain sufficient
Quality. 
B) with budget constraints public bureaucracies will have to cut costs at the expense of quality. 
C) without the profit incentive public bureaucracies will have to increase costs to maintain the quality. 
D) without the profit incentive public bureaucracies won't have an incentive to cut costs.(True Answer
)Correct 
A) with budget constraints public bureaucracies won't have an incentive to maintain sufficient
Quality. 
B) with budget constraints public bureaucracies will have to cut costs at the expense of quality. 
C) without the profit incentive public bureaucracies will have to increase costs to maintain the quality. 
D) without the profit incentive public bureaucracies won't have an incentive to cut costs.(True Answer
)Correct

Question 3

One of the exceptions to the efficient markets hypothesis is thatexperts can get better returns than others.

Accepted Answer

A) True 
 B)False

Question 4

Schools are rewarded for how well their studentsperform on standardized test scores but allowed toexclude test scores for learning disabled students whensubmitting results to the state. What incentive does thispolicy provide?

Accepted Answer

A) work with low-performing students to increase their test scores 
B) channel low-performing students into learning disability programs 
C) increase vigilance in testing for learning disabilities 
D) hire more special needs educators for the public school system 
A) work with low-performing students to increase their test scores 
B) channel low-performing students into learning disability programs 
C) increase vigilance in testing for learning disabilities 
D) hire more special needs educators for the public school system

Question 5

establishment of a piece rate system can lead toincreased productivity and higher quality work if:
I. the piece rate is considerably higher than existingwages
II.the workers are held responsible for the jobs thatthey personally complete
III. there is a reliable measure of quality control.

Accepted Answer

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

Question 6

Ideally, what types of rewards form the best incentives?

Accepted Answer

A) extrinsic 
B) intrinsic 
C) intrinsic coupled with extrinsic 
D) No one knows. 
A) extrinsic 
B) intrinsic 
C) intrinsic coupled with extrinsic 
D) No one knows.

Question 7

A weak incentive scheme that incentivizes the wrongthing can be worse than a strong incentive scheme.

Accepted Answer

A) True 
 B)False

Question 8

An hourly wage pays workers for their output, whereasa piece rate pays workers directly for their input.

Accepted Answer

A) True 
 B)False

Question 9

A risk-loving individual would choose which of the followinginvestment instruments?

Accepted Answer

A) government bonds 
B) stocks from a company listed on the Dow Jones Industrial Average 
C) stock from a very new company that has high growth potential 
D) a low-risk mutual fund 
A) government bonds 
B) stocks from a company listed on the Dow Jones Industrial Average 
C) stock from a very new company that has high growth potential 
D) a low-risk mutual fund

Question 10

students are given a project to work on together.Each student could either work or shirk. There is noindividual accountability, each student receives the samegrade regardless of how much work he or shecontributes. One student is a weak student who preferspartying and the other is a serious student who prefersworking hard. What is the most likely outcome in thisscenario?

Accepted Answer

A) The serious student will end up completing most of the project alone. 
B) The weak student will end up completing most of the project alone. 
C) Both students will work equally hard on the project. 
D) Neither student will complete the project. 
A) The serious student will end up completing most of the project alone. 
B) The weak student will end up completing most of the project alone. 
C) Both students will work equally hard on the project. 
D) Neither student will complete the project.

Question 11

Enron and other similar scandals were in part theresult of a strong incentive scheme.

Accepted Answer

A) True 
 B)False

Question 12

Paying an expert to help pick stocks will likely yield betterreturns than most alternative strategies for stock selection.

Accepted Answer

A) True 
 B)False

Question 13

If an individual's labor supply curve is downward sloping, thisindicates that:

Accepted Answer

A) the individual has become wealthier. 
B) the income effect dominates the substitution effect.(True Answer )Correct 
C) the substitution effect dominates the income effect. 
D) the individual faces a diminishing marginal utility for leisure. 
A) the individual has become wealthier. 
B) the income effect dominates the substitution effect.(True Answer )Correct 
C) the substitution effect dominates the income effect. 
D) the individual faces a diminishing marginal utility for leisure.

Question 14

Accepted Answer

A) The labor supply curve is downward sloping. 
B) The labor supply curve is upward sloping.(True Answer )Correct 
C) The income effect denominates the substitution effect. 
D) The worker earns $6.00 an hour. 
A) The labor supply curve is downward sloping. 
B) The labor supply curve is upward sloping.(True Answer )Correct 
C) The income effect denominates the substitution effect. 
D) The worker earns $6.00 an hour.

Question 15

Compared to a piece rate system, hourly-wage plansare more likely to attract workers who are less capableor even lazy.

Accepted Answer

A) True 
 B)False

Question 16

The closer "what you pay for" is to "what you want,"then the more you can rely on weak incentives.

Accepted Answer

A) True 
 B)False

Question 17

is the concern with private prisons?

Accepted Answer

A) Private prisons may cut costs to increase profit at the expense of prisoner rehabilitation programs, civil rights,
And safety. 
B) The increased efficiency of private prisons may put public prisons out of business. 
C) Private prisons will cost taxpayers too much money to operate because they will cut costs in the short run
Increasing recidivism rates. 
D) Private prisons are likely to overemphasize quality and cost taxpayers too much money in the long
run. 
A) Private prisons may cut costs to increase profit at the expense of prisoner rehabilitation programs, civil rights,
And safety. 
B) The increased efficiency of private prisons may put public prisons out of business. 
C) Private prisons will cost taxpayers too much money to operate because they will cut costs in the short run
Increasing recidivism rates. 
D) Private prisons are likely to overemphasize quality and cost taxpayers too much money in the long
run.

Question 18

Piece rates benefit productive workers by giving theman opportunity to use their skills to make more moneyand benefit firms by increasing productivity more thanwages.

Accepted Answer

A) True 
 B)False

Question 19

Stocks are better than bonds:

Accepted Answer

A) in the short run. 
B) because stocks have guaranteed returns. 
C) in the long run. 
D) because bonds are issued only by companies in financial distress. 
A) in the short run. 
B) because stocks have guaranteed returns. 
C) in the long run. 
D) because bonds are issued only by companies in financial distress.

Question 20

Accepted Answer

A) The price of music downloads decreased. 
B) The price of movie downloads increased. 
C) This consumer's income increased. 
D) This consumer's income decreased. 
A) The price of music downloads decreased. 
B) The price of movie downloads increased. 
C) This consumer's income increased. 
D) This consumer's income decreased.

incentive to cut costs is for prisons (as/than) it is for prisons.

usual argument against government bureaucracy isthat:

One of the exceptions to the efficient markets hypothesis is thatexperts can get better returns than others.

Schools are rewarded for how well their studentsperform on standardized test scores but allowed toexclude test scores for learning disabled students whensubmitting results to the state. What incentive does thispolicy provide?

establishment of a piece rate system can lead toincreased productivity and higher quality work if: I. the piece rate is considerably higher than existingwages II.the workers are held responsible for the jobs thatthey personally complete III. there is a reliable measure of quality control.

Ideally, what types of rewards form the best incentives?

A weak incentive scheme that incentivizes the wrongthing can be worse than a strong incentive scheme.

An hourly wage pays workers for their output, whereasa piece rate pays workers directly for their input.

A risk-loving individual would choose which of the followinginvestment instruments?

Enron and other similar scandals were in part theresult of a strong incentive scheme.

Paying an expert to help pick stocks will likely yield betterreturns than most alternative strategies for stock selection.

If an individual's labor supply curve is downward sloping, thisindicates that:

Compared to a piece rate system, hourly-wage plansare more likely to attract workers who are less capableor even lazy.

The closer "what you pay for" is to "what you want,"then the more you can rely on weak incentives.

is the concern with private prisons?

Piece rates benefit productive workers by giving theman opportunity to use their skills to make more moneyand benefit firms by increasing productivity more thanwages.

Stocks are better than bonds:

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

incentive to cut costs is ________ for ________prisons (as/than) it is for ________ prisons.

usual argument against government bureaucracy isthat:

One of the exceptions to the efficient markets hypothesis is thatexperts can get better returns than others.

Schools are rewarded for how well their studentsperform on standardized test scores but allowed toexclude test scores for learning disabled students whensubmitting results to the state. What incentive does thispolicy provide?

establishment of a piece rate system can lead toincreased productivity and higher quality work if: I. the piece rate is considerably higher than existingwages II.the workers are held responsible for the jobs thatthey personally complete III. there is a reliable measure of quality control.

Ideally, what types of rewards form the best incentives?

A weak incentive scheme that incentivizes the wrongthing can be worse than a strong incentive scheme.

An hourly wage pays workers for their output, whereasa piece rate pays workers directly for their input.

A risk-loving individual would choose which of the followinginvestment instruments?

Enron and other similar scandals were in part theresult of a strong incentive scheme.

Paying an expert to help pick stocks will likely yield betterreturns than most alternative strategies for stock selection.

If an individual's labor supply curve is downward sloping, thisindicates that:

Compared to a piece rate system, hourly-wage plansare more likely to attract workers who are less capableor even lazy.

The closer "what you pay for" is to "what you want,"then the more you can rely on weak incentives.

is the concern with private prisons?

Piece rates benefit productive workers by giving theman opportunity to use their skills to make more moneyand benefit firms by increasing productivity more thanwages.

Stocks are better than bonds:

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

incentive to cut costs is for prisons (as/than) it is for prisons.