Principles of Information and Behavioral Economics Quiz
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Questions and Answers

Which one of these best describes the concept of moral hazard?

  • The tendency of a person to engage in dishonest behavior when they are not being monitored (correct)
  • The tendency of a person to engage in honest behavior when they are not being monitored
  • The tendency of a person to engage in dishonest behavior when they are being monitored
  • The tendency of a person to engage in honest behavior when they are being monitored

    • Which one of these is an example of how employers can respond to moral hazard?

  • Lower wages
  • Reduced workload
  • Better monitoring (correct)
  • Immediate payment

    • Which one of these best describes the concept of adverse selection?

  • A situation where both the principal and the agent have equal knowledge
  • A situation where neither the principal nor the agent have any knowledge
  • A situation where an agent knows more about their situation than the principal
  • A situation where a principal knows more about their situation than the agent (correct)

    • Which one of these best describes the concept of signaling?

    <p>An action taken by an informed party to reveal private information to an uninformed party</p> Signup and view all the answers

    Which one of these best describes the concept of screening?

    <p>An action taken by an uninformed party to induce an informed party to reveal information</p> Signup and view all the answers

    Which one of these best describes the concept of asymmetric information?

    <p>Where two parties have access to different information</p> Signup and view all the answers

    Which one of these best describes the concept of satisficers?

    <p>Those who make decisions based on securing a satisfactory rather than optimal outcome</p> Signup and view all the answers

    Which one of these best describes the concept of behavioral economics?

    <p>The study of how human beings make errors in decision-making and are influenced by framing and value of outcomes</p> Signup and view all the answers

    Which one of these best describes the concept of principal in information and behavioral economics?

    <p>A person for whom another person, called the agent, is performing some act</p> Signup and view all the answers

    Which one of these best describes the concept of agent in information and behavioral economics?

    <p>A person who is performing an act for another person, called the principal</p> Signup and view all the answers

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