曼昆经济学原理第五版微观经济学习题答案英文.doc

22FRONTIERS OF MICROECONOMICSWHAT’S NEW IN THE FIFTH EDITION:There is a new In the News feature on “This Is Your Brain on Economics.〞LEARNING OBJECTIVES:By the end of this chapter, students should understand: how to examine problems caused by asymmetric information. the market solutions to asymmetric information. why democratic voting systems may not represent the preferences of society. why people may not always behave as rational maximizers.CONTEXT AND PURPOSE:Chapter 22 is the last chapter in the microeconomics portion of the text. It is the second of two unrelated chapters that introduce students to advanced topics in microeconomics. These two chapters are intended to whet their appetites for further study in economics. The purpose of Chapter 22 is to give students a taste of three topics on the frontier of microeconomic research. The first topic addressed is asymmetric information, a situation when one person in an economic relationship has more relevant knowledge than the other person does. The second topic is political economy, the application of economic tools to the understanding of the functioning of government. The third topic addressed is behavioral economics, the introduction of psychology into the study of economic issues.KEY POINTS: In many economic transactions, information is asymmetric. When there are hidden actions, principals may be concerned that agents suffer from the problem of moral hazard. When there are hidden characteristics, buyers may be concerned about the problem of adverse selection among the sellers. Private markets sometimes deal with asymmetric information with signaling and screening. Although government policy can sometimes improve market outcomes, governments are themselves imperfect institutions. The Condorcet paradox shows that the majority rule fails to produce transitive preferences for society, and the Arrow impossibility theorem shows that no voting scheme will be perfect. In many situations, democratic institutions will produce the outcome desired by the median voter, regardless of the preferences of the rest of the electorate. Moreover, the individuals who set government policy may be motivated by self-interest rather than national interest. The study of psychology and economics reveals that human decision making is more complex than is assumed in conventional economic theory. People are not always rational, they care about the fairness of economic outcomes (even to their own detriment), and they can be inconsistent over time.CHAPTER OUTLINE:This is a great chapter to get students interested in further study of economics. It is important for the students to learn that economics is a growing and developing science and that economists are always looking for new areas to study and new phenomena to explain.I. Asymmetric InformationA. Many times in life, one person holds more knowledge about what is going on than another. Such a difference in access to relevant information is known as an information asymmetry.B. Examples1. A worker knows more than his employer about the level of his work effort. This is an example of a hidden action.2. A seller of a used car knows more than the buyer does about the cars condition. This is an example of a hidden characteristic.C. When there is asymmetric information, the party without the relevant knowledge would like to have such knowledge, but the other party may have an incentive to conceal it.D. Hidden Actions: Principals, Agents, and Moral Hazard1. Important Definitions a. Definition of moral hazard: the tendency of a person who is imperfectly monitored to engage in dishonest or otherwise undesirable behavior.b. Definition of agent: a person who is performing an act for another person, called the principal.c. Definition of principal: a person for whom another person, called the agent, is performing some act.2. The employment relationship is the classic example.a. Workers (agents) may be tempted to shirk their work-related responsibilities because their employers (the principals) do not monitor their behavior closely.b. Employers can respond by providing better monitoring, paying higher wages, or delaying part of the workers pay until later in the workers life.3. FYI: Corporate Managementa. From an economic standpoint, the most important feature of the corporate form of organization is the separation of ownership and control.b. This creates a principal–agent problem where the shareholders are the principals and the managers are the agents.c. Managers’ goals may not always coincide with profit maximization.d. As a result, many managers are provided compensation packages that provide incentives to act in the best interest of corporate profits.E. Hidden Characteristics: Adverse Selection and the Lemons Problem1. Definition of adverse sele。