1)The case study of segregated street cars in southern cities illustrates which of the following?

1)The case study of segregated street cars in southern cities illustrates which of the following?

a.Firms usually care more about maximizing profits than discriminating against certain customers.

b.Laws passed by the government cannot reduce discrimination.

c.Segregation laws were supported by both local business owners and patrons.

d.Streetcar owners opposed segregation laws primarily because they were concerned with civil rights.

2)Steve borrowed some money from Summit Bank, telling the loan officer that he intended to use the money to remodel his restaurant. After getting the loan, Steve and his girlfriend immediately took the money and went gambling in Vegas.

a.From the given information, Steve is the principal and Summit Bank is the agent.

b.This example does not involve asymmetric information.

c.None of the above are correct.

d.This is an example of adverse selection since banks have difficulty selecting their customers.

3)Table 22-14

Amy, Beth, and Connie are on a hiring committee. They have interviewed 3 candidates identified by their last names and are going to vote on which one is hired.




First choiceAdams



Second choiceBrown



Third choiceCampbell



Refer to Table 22-14. Below are lists of results for two separate elections between two candidates. In which case are both results correct?

a.Adams wins over Brown and Brown wins over Campbell

b.Brown wins over Adams and Brown wins over Campbell

c.Adams wins over Brown and Campbell wins over Brown

d.Brown wins over Adams and Campbell wins over Brown

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