Question 1

A student sending in an application with a writing sample to a college is an example of:

Accepted Answer

A) signaling. 
B) screening. 
C) building a reputation. 
D) statistical discrimination. 
A) signaling. 
B) screening. 
C) building a reputation. 
D) statistical discrimination.

Question 2

The tendency for people to behave in a riskier way or to renege on contracts when they do not face the full consequences of their actions is called:

Accepted Answer

A) moral hazard. 
B) adverse selection. 
C) counter information. 
D) collective bargaining. 
A) moral hazard. 
B) adverse selection. 
C) counter information. 
D) collective bargaining.

Question 3

Taking action to reveal private information about someone else is called:

Accepted Answer

A) screening. 
B) signaling. 
C) discriminating. 
D) illegal. 
A) screening. 
B) signaling. 
C) discriminating. 
D) illegal.

Question 4

When one person knows more than another,it creates a situation:

Accepted Answer

A) called information asymmetry. 
B) in which the transaction is always regretted. 
C) in which the transaction will not occur. 
D) called information dominance. 
A) called information asymmetry. 
B) in which the transaction is always regretted. 
C) in which the transaction will not occur. 
D) called information dominance.

Question 5

Both signaling and screening:

Accepted Answer

A) are effective ways to increase information available to both parties. 
B) decrease efficiencies in the market. 
C) decrease surplus gained in a market. 
D) All of these statements are true. 
A) are effective ways to increase information available to both parties. 
B) decrease efficiencies in the market. 
C) decrease surplus gained in a market. 
D) All of these statements are true.

Question 6

When government mandates participation in a program to solve an information asymmetry problem,it is trying to prevent:

Accepted Answer

A) adverse selection. 
B) moral hazard. 
C) building a reputation. 
D) illegal screening. 
A) adverse selection. 
B) moral hazard. 
C) building a reputation. 
D) illegal screening.

Question 7

Generalizing using statistical discrimination is always:

Accepted Answer

A) a rational response. 
B) an ethical response. 
C) a legal response. 
D) All of these statements are true. 
A) a rational response. 
B) an ethical response. 
C) a legal response. 
D) All of these statements are true.

Question 8

The presence of adverse selection in a market causes:

Accepted Answer

A) some transactions fail to take place. 
B) a loss of surplus. 
C) market failure. 
D) All of these statements are true. 
A) some transactions fail to take place. 
B) a loss of surplus. 
C) market failure. 
D) All of these statements are true.

Question 9

Statistical discrimination is when you take action to:

Accepted Answer

A) reveal private information about someone else. 
B) reveal one's own private information. 
C) find out the opportunity cost of acquiring more information. 
D) fill gaps in your information by generalizing based on observable characteristics. 
A) reveal private information about someone else. 
B) reveal one's own private information. 
C) find out the opportunity cost of acquiring more information. 
D) fill gaps in your information by generalizing based on observable characteristics.

Question 10

Consumer Reports' reviews of products:

Accepted Answer

A) correct an inefficiency in the market. 
B) allow more transactions that are valuable to buyers and sellers to take place. 
C) credibly provide more information to market participants. 
D) All of these statements are true. 
A) correct an inefficiency in the market. 
B) allow more transactions that are valuable to buyers and sellers to take place. 
C) credibly provide more information to market participants. 
D) All of these statements are true.

Question 11

An insurance company offering high-deductible and low-deductible plans is an example of:

Accepted Answer

A) screening. 
B) signaling. 
C) statistical discrimination. 
D) building a reputation. 
A) screening. 
B) signaling. 
C) statistical discrimination. 
D) building a reputation.

Exam 10: Information

A student sending in an application with a writing sample to a college is an example of:

The tendency for people to behave in a riskier way or to renege on contracts when they do not face the full consequences of their actions is called:

Taking action to reveal private information about someone else is called:

When one person knows more than another,it creates a situation:

Both signaling and screening:

When government mandates participation in a program to solve an information asymmetry problem,it is trying to prevent:

Generalizing using statistical discrimination is always:

The presence of adverse selection in a market causes:

Statistical discrimination is when you take action to:

Consumer Reports' reviews of products:

An insurance company offering high-deductible and low-deductible plans is an example of:

Economics and Life

Specialization and Exchange

Markets

Elasticity

Efficiency

Government Intervention

Consumer Behavior

Behavioral Economics: A Closer Look at Decision Making

Game Theory and Strategic Thinking

Time and Uncertainty

The Costs of Production

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

The Factors of Production

International Trade

Externalities

Public Goods and Common Resources

Taxation and the Public Budget

Poverty, Inequality, and Discrimination

Political Choices

Public Policy and Choice Architecture

Measuring the Wealth of Nations

The Cost of Living

Economic Growth

Unemployment and the Demand for Labor

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Basics of Finance

Money and the Monetary System

Inflation

Financial Crisis

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