Multiple Choice Quiz

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1		Two students arrive at the coffee machine at the same time. Both students want a cup of coffee. The coffee-machine can only serve one person at a time. What type of problem is presented here?
			A)	Hidden characteristics problem.
			B)	Hidden action problem.
			C)	Coordination problem.
			D)	Incentive problem.
2		A coordination problem is characterized by
			A)	asymmetric information.
			B)	two or more equilibria.
			C)	equal payoffs.
			D)	the sum of consumer and producer surplus.
3		Which of the following is not a solution to a coordination problem?
			A)	Generate additional information.
			B)	Decrease the choice possibilities.
			C)	Increase Pareto efficiency.
			D)	Change the payoffs.
4		Which of the following is not a criterion for evaluating a coordination mechanism?
			A)	Compatibility.
			B)	Robustness.
			C)	Simplicity.
			D)	Efficiency.
5		Which criterion is met by the price mechanism as a coordination device in a symphony orchestra?
			A)	Compatibility.
			B)	Robustness.
			C)	Simplicity.
			D)	Efficiency.
6		The aim of changing the payoffs in a coordination problem is to
			A)	align incentives.
			B)	reduce the information asymmetry.
			C)	design a fair outcome.
			D)	establish a unique equilibrium.
7		The attractiveness of planning based on prices, compared to planning based on quantities, is based on which criterion?
			A)	Compatibility.
			B)	Robustness.
			C)	Simplicity.
			D)	Efficiency.
8		The attractiveness of planning based on prices, compared to planning based on quantities, is determined by
			A)	the employees.
			B)	the nature of uncertainty.
			C)	the slope of the marginal costs and marginal revenues curve.
			D)	the boss.
9		Working part-time is not attractive from a coordination perspective because
			A)	employees are not fully committed to their job.
			B)	it entails difficulties in transmitting all relevant information.
			C)	possibilities for job enrichment are left unexploited.
			D)	economies of scale are lost.
10		The attractiveness of democratic versus dictatorial decision making is determined by the trade-off between
			A)	delay and duplication.
			B)	prices and quantities.
			C)	employers and employees.
			D)	None of the above