Your economics professor has announced that he or she will assign final grades as follows: the top 20 percent of students will get an A, the bottom 20 percent of students will get an F, and everyone else will get a C. You would expect that, as the semester progresses, students who really care about getting an A will:
A)study less and less to maintain low standards.
B)try to forget about the grading scheme.
C)engage in a positional arms race, studying more and more.
D)maintain a stable agreement to not study for exams.

Question

Quizplus · Accepted Answer

The grading scheme imposes a positional competition among students, in which there are limited A grades available. Therefore, students who care about getting an A will have an incentive to study harder as the semester progresses, in order to outperform their peers and secure a spot among the top 20%. This is known as a positional arms race, in which the effort of one student increases the effort of others, leading to a higher overall level of effort. Choices A, B, and D are unlikely outcomes, as they are inconsistent with the given grading scheme and the rational behavior of students.

Your Economics Professor Has Announced That He or She Will