1. Which of the following is a possible criticism of the happy-is-productive model?
A. The roles attributed to managers under this model represented a new brand of elitism.
B. The economic interests of employees were inappropriately emphasized under this model.
C. The model is based on the assumption that firms operate in a market where there is fierce competition among firms.
D. The model proves to be expensive for a firm to execute.
2. Which of the following is a feature of a behavioral economic model?
A. It focuses on cognitive, emotional, and social factors that affect individual decisions.
B. It considers incentives an unimportant tool to study human behavior.
C. It suggests that individuals always behave rationally.
D. It is based on marginal analysis in decision making.
3. The ______ of an uncertain payoff is defined as the weighted average of all possible outcomes, where the probability of each outcome is used as the weights.
A. expected value
B. standard deviation
C. variance
D. skewness
4. If employees’ activities follow the economists’ view of behavior, managers will be most effective if they can
A. influence the costs and benefits of employee actions.
B. improve employee satisfaction with the job.
C. communicate goals and objectives effectively to their employees.
D. fire inefficient employees.
5. There is an increase in availability of alternative fuels through research and development. Which of the following correctly captures the effect of this change on the market for gasoline?
A. Both equilibrium quantity and price will increase.
B. Both equilibrium quantity and price will decrease.
C. Equilibrium quantity will increase, but equilibrium price will decrease.
D. Equilibrium quantity will decrease, but equilibrium price will increase
6. There is an OPEC cartel that reduces the production of world oil by several million barrels a day. Which of the following correctly captures the effect of this change on the market for gasoline?
A. Both equilibrium quantity and price will increase.
B. Both equilibrium quantity and price will decrease.
C. Equilibrium quantity will increase, but equilibrium price will decrease.
D. Equilibrium quantity will decrease, but equilibrium price will increase.