Question

Microeconomics Questions!

Please choose the correct answer, and also 'explain' the reasons why the answers I chose were 'wrong'. At least 3 sentences for explanation, please!

1. Prior to you starting this exam, Professor Jackson was the only person to know the questions on this exam. This is an example of:

A. Adverse Selection Problem

B. Moral hazard

C. Perfect Information

D. Asymmetric Information

(*I chose A - Adverse Selection Problem, and it was a wrong answer. Please tell me the right answer and explain why 'A - Adverse Selection Problem' is a wrong choice.)

2. Your credit card company requires a minimum payment of $100 on your credit card bill which totals $6,000. The minimum payment amount is an example of the credit card company using:

A. Anchoring Bias

B. Nudge

C. Herd Mentality

D. Status Quo Bias

(*I chose D - Status Quo Bias, and it was a wrong answer. Please tell me the right answer and explain why 'D - Status Quo Bias' is a wrong choice.)

3. At the beginning of every fall semester on campus, the Counseling Center puts out information about the lower than expected percentages of college students who drink alcohol while in college. This is an example of using:

A. Anchoring Bias

B. Nudge

C. Herd Mentality

d. Status Quo Bias

(*I chose B - Nudge, and it was a wrong answer. Please tell me the right answer and explain why 'B - Nudge' is a wrong choice.)

4. The total utility for an item is always positive.

A. True

B. False

(*I chose A - True, and it was a wrong answer. Please tell me the right answer and explain why 'A - True' is a wrong choice.)

*Please answer all of the 4 questions instead of answering just 1 question!

Answer 1