Question 1

Which of the following statements is not correct?
A) Majority rule explains why politicians appeal to the middle of the voting distribution.
B) Based on studies of human decision making,most people prefer to procrastinate,both in the immediate future and in the distant future.
C) Screening refers to an uninformed party trying to extract information from an informed party.
D) Advertising can be an example of a company signaling the quality of its products.

Accepted Answer

Studies of human decision making have shown that procrastination is not a preference for most people. In fact, it is often seen as a negative trait and people try to overcome it.

Question 2

Which of the following statements is not correct?
A) Based on studies of human decision making,most people value fairness.
B) Based on studies of human decision making,some people's preference are inconsistent over time.
C) Government intervention is the best remedy for the problems caused by asymmetric information.
D) Advertising can be an example of a company signaling the quality of its products.

Accepted Answer

While government intervention can be a remedy for problems caused by asymmetric information, it is not always the best remedy. Other solutions include market-based mechanisms such as reputation, third-party certification, and guarantees.

Quiz 22: Frontiers of Microeconomics

Which of the following statements is not correct?

Which of the following statements is not correct?