Do School Teachers and Sumo Wrestlers Have in Common Answer
Chapter 1 What Do Schoolteachers and Sumo Wrestlers Have in Common?
I. Multiple-Choice Questions
1. Which of the following statements best captures the essence of economic analysis?
a) No pain, no gain.
b) Everything has a price.
c) Incentives matter.
d) Scarcity is only relative.
Correct Answer: C
2. Which of the following is not an example of an economic incentive?
a) A factory is required to pay a fine for each unit of pollution it produces in excess of the legal limit.
b) A tax is imposed on each bottle of French wine imported into the country.
c) A jewelry salesman is paid on commission.
d) Posting the pictures of convicted prostitutes on the Internet.
Correct Answer: D
3. According to the example in the text, when a monetary fine was imposed for picking up one’s child late at a day care center, the number of late pickups actually rose. Which of the following correctly explains this behavior?
a) The monetary fine was less than the moral cost the tardy parent incurred when there was no fine.
b) The monetary cost of the fine was greater than the opportunity cost of being on time.
c) The marginal benefit from being on time exceeded the marginal cost.
d) The marginal cost of being late was zero.
Correct Answer: A
4. In which of the following situations would a moral incentive more likely be effective than a modest economic incentive?
a) Someone is considering letting the time on a parking meter expire.
b) A politician is considering having an illicit affair.
c) An employee is considering embezzling a small amount of money from the place where she works.
d) Someone is considering driving while under the influence of alcohol.
Correct Answer: B
5. Which of the following explains why people are willing to give more blood when there is only a moral incentive than when they are offered a small amount of cash (an economic incentive)?
a) The value of the moral incentive (praise for their kind-hearted act) is greater than
I. Multiple-Choice Questions
1. Which of the following statements best captures the essence of economic analysis?
a) No pain, no gain.
b) Everything has a price.
c) Incentives matter.
d) Scarcity is only relative.
Correct Answer: C
2. Which of the following is not an example of an economic incentive?
a) A factory is required to pay a fine for each unit of pollution it produces in excess of the legal limit.
b) A tax is imposed on each bottle of French wine imported into the country.
c) A jewelry salesman is paid on commission.
d) Posting the pictures of convicted prostitutes on the Internet.
Correct Answer: D
3. According to the example in the text, when a monetary fine was imposed for picking up one’s child late at a day care center, the number of late pickups actually rose. Which of the following correctly explains this behavior?
a) The monetary fine was less than the moral cost the tardy parent incurred when there was no fine.
b) The monetary cost of the fine was greater than the opportunity cost of being on time.
c) The marginal benefit from being on time exceeded the marginal cost.
d) The marginal cost of being late was zero.
Correct Answer: A
4. In which of the following situations would a moral incentive more likely be effective than a modest economic incentive?
a) Someone is considering letting the time on a parking meter expire.
b) A politician is considering having an illicit affair.
c) An employee is considering embezzling a small amount of money from the place where she works.
d) Someone is considering driving while under the influence of alcohol.
Correct Answer: B
5. Which of the following explains why people are willing to give more blood when there is only a moral incentive than when they are offered a small amount of cash (an economic incentive)?
a) The value of the moral incentive (praise for their kind-hearted act) is greater than