Question 1

When some people are better informed than others and the imbalance affects the choices they make, economists say there is

Accepted Answer

The answer of When some people are better informed than...

Question 2

Pete owns a small store. He has noticed that when he is not at the store monitoring his employees, his revenue goes down. What are two changes Pete could make to wages he pays his employees to correct this problem?

Accepted Answer

The answer of Pete owns a small store. He has...

Question 3

Which of the following is not correct?
A)Economics is a study of the choices that people make and the resulting interactions they have with one another.
B)In areas it has already studied, economists have found perfect and unchanging answers.
C)Economists are trying to expand their understanding of human behavior and society.
D)The economics of asymmetric information, political economy, and behavioral economics are all topics at the frontier of microeconomics.

Accepted Answer

Economists recognize that the world is complex and constantly changing, and that there is no single perfect answer to economic questions. While economics can provide insight and guidance, there are many factors and variables that can impact outcomes, and economists are constantly seeking to expand their understanding of human behavior and society.

Question 4

When markets fail, which of the following is true?
A)Government intervention can always improve outcomes.
B)Government intervention can potentially improve outcomes.
C)Government intervention can never improve outcomes.
D)Markets do not fail.

Accepted Answer

While government intervention does not always guarantee improvement in outcomes, it can potentially improve them in cases where markets are failing. This is because markets can have externalities, information asymmetries or imperfect competition, leading to market failure which can be corrected by government intervention. However, it is important to note that the type and extent of government intervention needed will vary depending on the situation.

Question 5

The field of behavioral economics builds a more subtle and complex model of economic behavior using insights from
A)physics.
B)biology.
C)psychology.
D)anthropology.

Accepted Answer

The field of behavioral economics draws extensively from psychology, applying insights from research on human behavior and decision-making to the study of economic phenomena.

Question 6

An action taken by an informed party to reveal private information to an uninformed party is called

Accepted Answer

The answer of An action taken by an informed party...

Question 7

Asymmetric information, political economy, and behavioral economics
A)are topics at the frontier of microeconomics.
B)are topics that economists no longer research.
C)are attempts by economists to expand their understanding of human behavior and society.
D)both a and c are correct.

Accepted Answer

Asymmetric information, political economy, and behavioral economics are still topics actively researched and studied by economists. These topics aim to expand our understanding of human behavior and how society functions. Therefore, choice letter D is correct as choices A and C correctly represent these fields of study.

Question 8

Maria and Jose installed a "nanny-camera" in their home so that they can view how the nanny is interacting with their children while they are at work. What type of problem are they trying to combat?

Accepted Answer

The answer of Maria and Jose installed a "nanny-camera" in...

Question 9

​​When a principal attempts to get an agent to reveal his or her private information, which of the following is occurring?
A)​Screening
B)​Signalling
C)​Moral hazard
D)​Adverse selection

Accepted Answer

Screening is the process by which a principal tries to elicit private information from an agent.

Question 10

The problem that arises in markets in which the seller knows more about the characteristics of the good being sold than the buyer knows is

Accepted Answer

The answer of The problem that arises in markets in...

Question 11

The field of economics in which the tools of economics are used to understand the functioning of government is

Accepted Answer

The answer of The field of economics in which the...

Question 12

​Which of the following frontier areas of microeconomics applies economic tools to the study of government (or public) choice?
A)​Political economy
B)​Behavioral economics
C)​Game theory
D)​Industrial organization

Accepted Answer

Political economy applies economic tools to the study of government/public choice.

Question 13

The problem that results from an agent, who is imperfectly monitored by the principal, engaging in dishonest or otherwise undesirable behavior is called

Accepted Answer

The answer of The problem that results from an agent,...

Question 14

The field of economics that combines the study the psychology of human behavior and economic issues is

Accepted Answer

The answer of The field of economics that combines the...

Question 15

Which of the following frontier areas of economics incorporates some findings from psychology into the study of economic issues?
A)asymmetric information
B)political economy
C)behavioral economics
D)public economics

Accepted Answer

Behavioral economics incorporates findings from psychology into the study of economic issues.

Question 16

Which of the following frontier fields of economics identifies that people do not always act rationally?
A)asymmetric information
B)political economy
C)behavioral economics
D)existential economics

Accepted Answer

Behavioral economics is the frontier field of economics that identifies that people do not always act rationally. It combines psychology and economics to understand how individuals make decisions and how biases can affect their behavior.

Question 17

Bill would like to buy a gift for Ann to convey his love for her. Which of the following areas of economics would most likely study this type of decision?
A)asymmetric information
B)political economy
C)behavioral economics
D)industrial organization

Accepted Answer

The answer of Bill would like to buy a gift...

Question 18

People with hidden health problems are more likely to buy health insurance than other people. As a result, people in average health may observe the high prices of insurance and decide not to buy it. This is an example of

Accepted Answer

The answer of People with hidden health problems are more...

Question 19

When one party is better informed about an economic situation than another party, economists describe the problem as one of
A)asymmetric information.
B)confirmation bias.
C)political economy.
D)behavioral economics

Accepted Answer

The situation described is an example of asymmetric information, where one party has more information than the other. This creates an imbalance in the transaction and can lead to adverse selection, moral hazard, and other problems in the marketplace. Confirmation bias, political economy, and behavioral economics are not directly related to this particular situation.

Question 20

Brandon is considering buying a used car but he first downloads a report from the internet that shows the history of accidents and major repairs conducted on the car. This action is called

Accepted Answer

The answer of Brandon is considering buying a used car...

Quiz 22: Frontiers in Microeconomics

When some people are better informed than others and the imbalance affects the choices they make, economists say there is

Pete owns a small store. He has noticed that when he is not at the store monitoring his employees, his revenue goes down. What are two changes Pete could make to wages he pays his employees to correct this problem?

Which of the following is not correct?

When markets fail, which of the following is true?

The field of behavioral economics builds a more subtle and complex model of economic behavior using insights from

An action taken by an informed party to reveal private information to an uninformed party is called

Asymmetric information, political economy, and behavioral economics

Maria and Jose installed a "nanny-camera" in their home so that they can view how the nanny is interacting with their children while they are at work. What type of problem are they trying to combat?

​​When a principal attempts to get an agent to reveal his or her private information, which of the following is occurring?

The problem that arises in markets in which the seller knows more about the characteristics of the good being sold than the buyer knows is

The field of economics in which the tools of economics are used to understand the functioning of government is

​Which of the following frontier areas of microeconomics applies economic tools to the study of government (or public) choice?

The problem that results from an agent, who is imperfectly monitored by the principal, engaging in dishonest or otherwise undesirable behavior is called

The field of economics that combines the study the psychology of human behavior and economic issues is

Which of the following frontier areas of economics incorporates some findings from psychology into the study of economic issues?

Which of the following frontier fields of economics identifies that people do not always act rationally?

Bill would like to buy a gift for Ann to convey his love for her. Which of the following areas of economics would most likely study this type of decision?

People with hidden health problems are more likely to buy health insurance than other people. As a result, people in average health may observe the high prices of insurance and decide not to buy it. This is an example of

When one party is better informed about an economic situation than another party, economists describe the problem as one of

Brandon is considering buying a used car but he first downloads a report from the internet that shows the history of accidents and major repairs conducted on the car. This action is called

When a principal attempts to get an agent to reveal his or her private information, which of the following is occurring?

Which of the following frontier areas of microeconomics applies economic tools to the study of government (or public) choice?