Question 1

Shadow prices:

Accepted Answer

A)  are set by the government.
B)  are illegal.
C)  exist only in black markets.
D)  are paid in terms of opportunity costs.E) A) and C)
F) A) and B)

Question 2

Grocery stores often place items people buy on impulse at the checkout lane. This is an example of:

Accepted Answer

A)  choice architecture.
B)  government intervention.
C)  price fixing.
D)  irrational behavior.E) B) and D)
F) None of the above

Question 3

Shadow prices:

Accepted Answer

A)  affect decisions just as money prices do.
B)  are not binding and so do not affect decisions.
C)  are illegal but still affect decisions.
D)  exist only when money prices are paid in the market.E) A) and C)
F) All of the above

Question 4

When online seller Amazon sets the default mail option as two-day mailing instead of the free-shipping option, it is employing:

Accepted Answer

A)  a RECAP.
B)  a tax.
C)  a push.
D)  a nudge.E) A) and D)
F) A) and C)

Question 5

To resolve the problem of the negative effect of conspicuous consumption goods on society's welfare, an economist most likely would make the suggestion that:

Accepted Answer

A)  conspicuous consumption goods should be taxed.
B)  conspicuous consumption goods should be subsidized.
C)  conspicuous consumption goods should be eliminated.
D)  nothing should be done because laissez faire is the best policy.E) A) and B)
F) A) and C)

Question 6

Dating sites that match individuals such as Match.com and eHarmony.com are:

Accepted Answer

A)  free-market pricing models.
B)  government-implemented models.
C)  coordinating mechanism designs.
D)  auction markets.E) A) and B)
F) C) and D)

Question 7

In the practical application of behavioral economic policy,who is most likely to decide on what nudges will be used? Who is most likely to implement those nudges?

Accepted Answer

The political process,or the g...

Question 8

Behavioral economists believe that people should smoke as many cigarettes as they want.

Accepted Answer

A) True 
 B)False

Question 9

Presenting options in a fashion that makes people more likely to make one choice over another is called:

Accepted Answer

A)  the ACE model.
B)  natural experiments.
C)  choice architecture.
D)  traditional economicsE) A) and C)
F) A) and B)

Question 10

Suppose a company wanted to try to improve the health of its workers as part of its health initiative program. When constructing a new building, it decides to put the elevators significantly farther than the stairs from the main entrance. This would be considered as an example of a(n) :

Accepted Answer

A)  push.
B)  nudge.
C)  irrational behavior.
D)  laissez-faire policy.E) A) and C)
F) None of the above

Question 11

A traditional economist probably would not want to give up the assumption of consumer sovereignty because it:

Accepted Answer

A)  would violate Hume's dictum.
B)  is an empirically verifiable assumption.
C)  opens up a Pandora's box of problems and complexity.
D)  would violate the Schroeder principle.E) A) and B)
F) B) and D)

Question 12

Which of the following is not a policy implication of the traditional model?

Accepted Answer

A)  For the most part, the government needs to stay out of people's way and let them trade.
B)  There is a potential role for government if there are positive externalities.
C)  The government should take moral and social incentives into account when considering intervention.
D)  There is a potential role for government if there are negative externalities.E) B) and D)
F) A) and B)

Question 13

Despite the fact that economists are just starting to incorporate nudges into their recommendations for economic policy,nudges are not a new discovery.Where have nudges been used in the past,and by whom?

Accepted Answer

Answers:
Firms have used nudges for a lo...

Question 14

Paternalism describes a situation in which:

Accepted Answer

A)  the government passes laws that require citizens to change their behavior.
B)  people are likely to make bad decisions over and over.
C)  there is no role for firms to influence people's behavior.
D)  people are led to make better decisions (as judged by an outside decision maker) .E) A) and C)
F) A) and D)

Question 15

If an economist believes that choice architecture is important, he or she is more likely to be a:

Accepted Answer

A)  traditional economist.
B)  Keynesian economist.
C)  behavioral economist.
D)  formal economist.E) None of the above
F) A) and D)

Question 16

We call the situation in which the government makes a problem worse when it attempts to deal with it a(n) :

Accepted Answer

A)  incentive compatibility problem.
B)  deadweight loss.
C)  nudge.
D)  government failure.E) B) and D)
F) B) and C)

Question 17

What is the criterion of libertarian paternalism?

Accepted Answer

A policy that meets the criter...

Question 18

What distinguishes nudge policies from push policies?

Accepted Answer

A)  Nudges are libertarian, whereas pushes are not.
B)  Nudges affect choices, whereas pushes do not
C)  Nudges affect incentives, whereas pushes do not.
D)  Nudges are implemented by the government; pushes are implemented by firms.E) None of the above
F) B) and D)

Question 19

Suppose an instructor takes off points for students coming late to class. He then finds that the number of late arrivals has risen. This could have happened because the:

Accepted Answer

A)  money price of late arrivals declined.
B)  shadow price of late arrivals rose.
C)  shadow price of late arrivals declined.
D)  teacher did not fine the students monetarily for arriving late.E) All of the above
F) B) and C)

Question 20

Do nudges meet the criteria of libertarian paternalism?

Accepted Answer

For the most part,they do.Nudges do not ...

Exam 22: Behavioral Economics and Modern Economic Policy

Which of the following is not a policy implication of the traditional model?

Correct AnswerverifiedShow Answer

Presenting options in a fashion that makes people more likely to make one choice over another is called:

Correct AnswerverifiedShow Answer

Despite the fact that economists are just starting to incorporate nudges into their recommendations for economic policy,nudges are not a new discovery.Where have nudges been used in the past,and by whom?

Correct AnswerverifiedAnswers:Firms have used nudges for a lo...View AnswerShow Answer

What distinguishes nudge policies from push policies?

Correct AnswerverifiedShow Answer

To resolve the problem of the negative effect of conspicuous consumption goods on society's welfare, an economist most likely would make the suggestion that:

Correct AnswerverifiedShow Answer

A traditional economist probably would not want to give up the assumption of consumer sovereignty because it:

Correct AnswerverifiedShow Answer

Dating sites that match individuals such as Match.com and eHarmony.com are:

Correct AnswerverifiedShow Answer

Behavioral economists believe that people should smoke as many cigarettes as they want.

Correct AnswerverifiedShow Answer

Shadow prices:

Correct AnswerverifiedShow Answer

We call the situation in which the government makes a problem worse when it attempts to deal with it a(n) :

Correct AnswerverifiedShow Answer

In the practical application of behavioral economic policy,who is most likely to decide on what nudges will be used? Who is most likely to implement those nudges?

Correct AnswerverifiedThe political process,or the g...View AnswerShow Answer

Grocery stores often place items people buy on impulse at the checkout lane. This is an example of:

Correct AnswerverifiedShow Answer

If an economist believes that choice architecture is important, he or she is more likely to be a:

Correct AnswerverifiedShow Answer

Suppose a company wanted to try to improve the health of its workers as part of its health initiative program. When constructing a new building, it decides to put the elevators significantly farther than the stairs from the main entrance. This would be considered as an example of a(n) :

Correct AnswerverifiedShow Answer

What is the criterion of libertarian paternalism?

Correct AnswerverifiedA policy that meets the criter...View AnswerShow Answer

Suppose an instructor takes off points for students coming late to class. He then finds that the number of late arrivals has risen. This could have happened because the:

Correct AnswerverifiedShow Answer

Shadow prices:

Correct AnswerverifiedShow Answer

Paternalism describes a situation in which:

Correct AnswerverifiedShow Answer

When online seller Amazon sets the default mail option as two-day mailing instead of the free-shipping option, it is employing:

Correct AnswerverifiedShow Answer

Do nudges meet the criteria of libertarian paternalism?

Correct AnswerverifiedFor the most part,they do.Nudges do not ...View AnswerShow Answer

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Answers:
Firms have used nudges for a lo...
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The political process,or the g...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A policy that meets the criter...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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For the most part,they do.Nudges do not ...
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