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1 | |
Present-aim rationality |
| | A) | insists that one''s aims fit the prevailing social norms. |
| | B) | ignores possible motives like altruism, desire for justice and fidelity to principle. |
| | C) | takes aims as given exogenously and defines rationality in terms of efficiency in achieving these aims. |
| | D) | eliminates unusual or bizarre behaviour from economic consideration. |
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2 | |
If Anne''s utility function is U = f(Anne''s income + Gilbert''s income), then: |
| | A) | the rational self-interest assumption of behaviour will not predict Anne''s behaviour in many cases. |
| | B) | altruistic behaviour can be explained and predicted. |
| | C) | present-aim rationality is the only feasible way to model her behaviour. |
| | D) | all of the above are true. |
| | E) | none of the above are true. |
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3 | |
Biologists have helped economists see that |
| | A) | self-preservation, narrowly defined, is the only motive that preserves a species. |
| | B) | organisms'' tastes are arbitrarily given, rather than formed in a contest of adaptation. |
| | C) | preferences depend on historical and developmental circumstances. |
| | D) | all organisms have the same basic strategic preferences. |
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4 | |
The following four questions relate to the information below.
Pick-up basketball games involve two types of players, individualist ball hogs (I) and team playmakers (T). If individualists are on the same team , they average 10 points each. If team playmakers get together, they work for the open shot and average 25 points each. If Is and Ts play together the Is average 30 points each and the Ts average zero points. Players with the lowest personal scoring averages drop out of the player pool first. If teams are formed randomly for each game, what will be the equilibrium proportion of Is and Ts in the long run? |
| | A) | 100% Is and 0% Ts |
| | B) | 75% Is and 25% Ts |
| | C) | 50% Is and 50% Ts. |
| | D) | 25% Is and 75% Ts. |
| | E) | 0% Is and 100% Ts. |
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5 | |
If players are able costlessly to distinguish between types of players and then form teams by preference, what will the population of players eventually become? |
| | A) | 100% Is and 0% Ts |
| | B) | 75% Is and 25% Ts |
| | C) | 50% Is and 50% Ts. |
| | D) | 25% Is and 75% Ts |
| | E) | 0% Is and 100% Ts |
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6 | |
If players must pay for information about other players and the cost is equal to 10 points, then the equilibrium population will become: |
| | A) | 40% Ts and 60% Is |
| | B) | 100% Ts and 0% Is |
| | C) | 25% Ts and 75% Is |
| | D) | 75% Ts and 25% Is |
| | E) | 60% Ts and 40% Is |
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7 | |
The moral of the story presented in the three questions above is that |
| | A) | players who pretend to be team players but are really individualists will get further ahead in the long run. |
| | B) | outcomes are the same no matter what the basic nature of people. |
| | C) | self-centered individualists will always be better off than team players. |
| | D) | there is a viable niche for groups with significantly different but sincerely held preferences. |
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8 | |
The prisoner''s dilemma problem would result in the prisoners going free if |
| | A) | the prisoners were allowed to discuss their situation before being separately questioned. |
| | B) | the prisoners simply told the truth. |
| | C) | the prisoners could develop an effective, foolproof, commitment device. |
| | D) | each prisoner followed his/her self-interest assuming his/her partner would confess. |
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9 | |
Irrational behaviour or the credible threat of it |
| | A) | is bound to detract from an optimal outcome for an individual. |
| | B) | increases the possibility of credible commitments among people. |
| | C) | can reduce the need to continue the practice of such irrational behavior. |
| | D) | is what makes the prisoner''s dilemma outcome plausible. |
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10 | |
The models of preferences developed in Chapter 7: |
| | A) | suggest that the economist''s image of tastes can be expanded beyond the level of simple egoistic tastes. |
| | B) | demonstrate that it can be rational to be "irrational" in egoistic terms. |
| | C) | help constrain the open-ended nature of present-aim rationality. |
| | D) | do all of the above. |
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2002 McGraw-Hill Higher Education