Freakonomics Chapter 1 Flashcards

Questions and Answers

Which of the following statements best captures the essence of economic analysis?

Incentives matter (correct)

Everything has a price

Scarcity is only relative

No pain, no gain

Which of the following is not an example of an economic incentive?

A factory is required to pay a fine for each unit of pollution it produces in excess of the legal limit.

A jewelry salesman is paid on commission.

Posting the pictures of convicted prostitutes on the Internet. (correct)

A tax is imposed on each bottle of French wine imported into the country.

Which of the following correctly explains why the number of late pickups actually rose when a monetary fine was imposed?

The monetary fine was less than the moral cost the tardy parent incurred when there was no fine. (correct)

The marginal cost of being late was zero.

The marginal benefit from being on time exceeded the marginal cost.

The monetary cost of the fine was greater than the opportunity cost of being on time.

In which of the following situations would a moral incentive be more effective than a modest economic incentive?

A politician is considering having an illicit affair. Signup and view all the answers

Which of the following explains why people are willing to give more blood with only a moral incentive than with cash?

The value of the moral incentive (praise for their kind-hearted act) is greater than the value of the economic incentive. Signup and view all the answers

From an economic perspective, the incentive to cheat will be greatest when:

The expected benefits exceed the expected costs by the greatest amount. Signup and view all the answers

Some school teachers cheat because:

All of the above Signup and view all the answers

Which of the following incentives associated with high-stakes testing would contribute most to a student's learning?

The incentive students have to study harder. Signup and view all the answers

From a teacher's perspective, the knowledge that teacher cheating is rarely looked for and hardly ever punished has the effect of:

Reducing the expected cost of cheating. Signup and view all the answers

Assume 50 students take the same multiple-choice exam. Which of the following would be least likely to suggest some form of cheating took place?

The poor students get an average of four of the first five questions, which are easy, correct. Signup and view all the answers

Which of the following is not a distinguishing characteristic of the typical teacher who was caught cheating in the Chicago school system?

The teacher was a male. Signup and view all the answers

It's difficult to document cheating among sumo wrestlers in Japan because:

Sumo wrestling is a Japanese sport associated with the civility and honor of Japan. Signup and view all the answers

A sumo wrestler has the greatest incentive to cheat during a tournament when:

He is 'on the bubble,' i.e., when he has 7 wins and 7 losses. Signup and view all the answers

In which of the following scenarios would cheating in a sumo match be most likely to occur?

Wrestler A has an 8-6 record and wrestler B has a 7-7 record. Signup and view all the answers

Referring to the previous question, cheating most likely occurs in the scenario you selected because:

The gains to the winner outweigh the losses to the loser by the greatest amount. Signup and view all the answers

What incentive would a sumo wrestler with a winning record in a tournament have to help an opponent who is 'on the bubble'?

The knowledge that the opponent would do the same thing for him in the next tournament, which translates into one less win he has to worry about the next time around. Signup and view all the answers

Which of the following characteristics distinguishes white-collar crime from street crime?

All of the above. Signup and view all the answers

Using economic principles, how can we explain why a particular individual would be more likely to steal from someone they don't know than from someone they know and like?

The cost the thief incurs stealing from the friend is greater than the cost he incurs stealing from the stranger. Signup and view all the answers

Study Notes

Economic Analysis Concepts

Economic analysis fundamentally revolves around the principle that incentives matter.
Examples of economic incentives include fines, taxes, and commissions for salespeople, contrasting with non-economic incentives like moral obligations.

Behavior Influence by Monetary Incentives

Monetary fines can paradoxically lead to increased undesirable behaviors, as seen with late pickups at day care when fines are perceived as lesser than moral costs.
Situations that trigger moral incentives, such as a politician considering an illicit affair, illustrate how ethics can overpower economic factors.

Cheating Incentives

Cheating is most likely when the expected benefits of cheating significantly outweigh the expected costs.
High-stakes testing environments, where teachers may be incentivized to manipulate scores, showcase the pressures that lead to unethical choices in education.

Cheating Detection

Some indicators of cheating on tests include uniform high performance in large groups, whereas a random spread of correct answers suggests less likelihood of misconduct.
Characteristics of teachers caught cheating often include working in low-performing schools, long teaching tenures, and more.

Sumo Wrestling Dynamics

Sumo wrestlers face unique incentives related to their rankings, particularly when records are closely matched, increasing the incentive to cheat.
Social dynamics within tournaments can lead to moral incentives among wrestlers to assist opponents in precarious ranking situations.

White-Collar vs. Street Crime

White-collar crime is often distinguished by the lack of immediate victims, low detection rates, and the difficulties in quantifying its impact, setting it apart from more visible street crimes.

Thievery Contextualization

People are more likely to steal from strangers than friends due to the perceived greater cost associated with harming someone they know, highlighting the role of personal relationships in economic behavior.

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Description

Test your understanding of the key concepts in Chapter 1 of 'Freakonomics' with these flashcards. This chapter examines the importance of incentives in economic analysis through various scenarios and examples.

Freakonomics Chapter 1 Flashcards

Questions and Answers

Which of the following statements best captures the essence of economic analysis?

Which of the following is not an example of an economic incentive?

Which of the following correctly explains why the number of late pickups actually rose when a monetary fine was imposed?

In which of the following situations would a moral incentive be more effective than a modest economic incentive?

Which of the following explains why people are willing to give more blood with only a moral incentive than with cash?

From an economic perspective, the incentive to cheat will be greatest when:

Some school teachers cheat because:

Which of the following incentives associated with high-stakes testing would contribute most to a student's learning?

From a teacher's perspective, the knowledge that teacher cheating is rarely looked for and hardly ever punished has the effect of:

Assume 50 students take the same multiple-choice exam. Which of the following would be least likely to suggest some form of cheating took place?

Which of the following is not a distinguishing characteristic of the typical teacher who was caught cheating in the Chicago school system?

It's difficult to document cheating among sumo wrestlers in Japan because:

A sumo wrestler has the greatest incentive to cheat during a tournament when:

In which of the following scenarios would cheating in a sumo match be most likely to occur?

Referring to the previous question, cheating most likely occurs in the scenario you selected because:

What incentive would a sumo wrestler with a winning record in a tournament have to help an opponent who is 'on the bubble'?

Which of the following characteristics distinguishes white-collar crime from street crime?

Using economic principles, how can we explain why a particular individual would be more likely to steal from someone they don't know than from someone they know and like?

Study Notes

Economic Analysis Concepts

Behavior Influence by Monetary Incentives

Cheating Incentives

Cheating Detection

Sumo Wrestling Dynamics

White-Collar vs. Street Crime

Thievery Contextualization

Studying That Suits You

Description

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