Chapter 1
1. Explain how the imposition of a fine for tardy parents at a day care center may have altered motivations of these parents. The parents will have a reason to be prompt as apposed to an excuse to being late. Since they have to pay a fine anyways.
2. What is an incentive? How does it relate to the study of economics? An incentive is any factor that enables or motivates a particular course of action, or counts as a reason for preferring one choice to the alternatives.
3. What examples can you think of where moral or social incentives and economic incentives are both present? Are the different incentives complementary or competing? For each of the cases you cite, which do you think is the stronger incentive?
Charities want to make money to help the unfortunate. Give good to those who contribute, and those who contribute are helping a good cause. They are complimentary and the moral cause is stronger.
4. Describe some ways in which a school teacher might be able to improve the scores of his or her students on a standardized test.
Give them incentives to want to study to make a good grade.
5. How has a well motivated and seemingly begin government requirement to administer?
An example of another incentive. The people will not do things on their own.
6. Explain how Levitt devised a mean of examining student test scores to uncover evidence of cheating teachers. Explain also why Levitt's analysis of the data constituted evidence, but not proof, of cheating.
7. Explain what incentives, if any, a university might have to artificially improve the test scores and grades of its athletes.
Most universities have a minimum GPA that must be achieved to be on the team. If the scores were artificially improved, the athletes would then be able to spend more time with the team and continue to be on the team.
3. What examples can you think of where moral or social incentives and economic incentives are both present? Are the different incentives complementary or competing? For each of the cases you cite, which do you think is the stronger incentive?
Charities want to make money to help the unfortunate. Give good to those who contribute, and those who contribute are helping a good cause. They are complimentary and the moral cause is stronger.
4. Describe some ways in which a school teacher might be able to improve the scores of his or her students on a standardized test.
Give them incentives to want to study to make a good grade.
5. How has a well motivated and seemingly begin government requirement to administer?
An example of another incentive. The people will not do things on their own.
6. Explain how Levitt devised a mean of examining student test scores to uncover evidence of cheating teachers. Explain also why Levitt's analysis of the data constituted evidence, but not proof, of cheating.
7. Explain what incentives, if any, a university might have to artificially improve the test scores and grades of its athletes.
Most universities have a minimum GPA that must be achieved to be on the team. If the scores were artificially improved, the athletes would then be able to spend more time with the team and continue to be on the team.
8. Describe, in general terms, how sumo wrestling tournaments in Japan are arranged
and how the rank of an individual sumo wrestler might change as a result of his performance at one of these tournaments.The sumo wrestling tournaments in Japan are arranged where the top 40 wrestlers make at least 170,000 dollars a year. In a tournament the wrestler needs to win eight or better. A wrestler with an 8-6 ratio has almost nothing to lose whereas a 7-7 ratio wrester has everything to win. In the tournaments often when there is a 7-7 ratio against an 8-6 ratio the 7-7 ratio wins.
9. Describe what it means for a Japanese sumo wrestler to be “on the bubble” and what incentives this wrestler and his opponent may have to “throw” a wresting match.
When one stable’s wrestlers fare well on the bubble against wrestlers from a second stable, they tend to do especially poorly when the second stable’s wresters are on the bubble. This indicates that some match rigging may be choreographed at the highest level of the sport.The incentives that a wrestler might have to throw a match are he might be accepting a bribe. Or some other arrangement is made between two wrestlers. They might make an agreement saying “you let me win today, when I really need the victory, and I’ll let you win the next time.”10. How did Levitt construct a means of detecting evidence of cheating among Japanese sumo wrestlers? What evidence does he offer in support of his claim that some Japanese sumo wrestlers probably “throw” some of their matches?
Sumo wrestlers that have already won a spot in the top could easily beat the wrestler that is "in the bubble." The proformance standards do not mtach up. Then, we these same people meet again in a match neither at risk or "in the bubble" the stats seem to be that of what the match should have been when one was "in the bubble."
Sumo wrestlers that have already won a spot in the top could easily beat the wrestler that is "in the bubble." The proformance standards do not mtach up. Then, we these same people meet again in a match neither at risk or "in the bubble" the stats seem to be that of what the match should have been when one was "in the bubble."
11. How did Paul Feldman set up his bagel business in the Washington, D.C. area? How did it differ from most business models?
While working for a big business in Washington D.C. he started to bring in bagels into work and basket with a suggested price then later he would collect the money and leftovers. After Feldman quit his job, he starting doing this in multiple businesses. This is different because it leaves the comsumer (the business getting the bagels) to pay for the bagels themselves. They are not forced to pay like you usually are, it is only a suggestion.
While working for a big business in Washington D.C. he started to bring in bagels into work and basket with a suggested price then later he would collect the money and leftovers. After Feldman quit his job, he starting doing this in multiple businesses. This is different because it leaves the comsumer (the business getting the bagels) to pay for the bagels themselves. They are not forced to pay like you usually are, it is only a suggestion.
12. What do the authors of Freakonomics conclude from an analysis of the Paul Feldman’s bagel sales data? Do these conclusions match with economists’ expectations of human behavior?
13. What window does an analysis of the sales data of Paul Feldman’s bagel business open? Why is this usually a difficult subject for economists and others to analyze?
This bagel business provides evidence into white collar crime. In white collar crime there usually is not no victim but in this case Paul Feldman is the victim. When embezzlement happens there is not an problem (not one that needs to have action taken like in a murder or attack) the person who is commiting the crime says nothing and goes along with life "not hurting anyone." This makes white collar crime difficult to analyze.
14. Based on what can be learned from a study of sales data of Paul Feldman’s bagel business, what
variables affect the incidence of theft in an office setting?
Many factors came into play on whether a person payed for his bagel or not:
- Weather
- Holidays
- Rank at work (People ranked higher are more likely to cheat)
- Shame
Chapter 2
1. Describe, in broad terms, how the Ku Klux Klan came into existence and how its level of popularity varied over time. In addition, identify specific factors that caused the Klan’s popularity to rise or fall.
I think it came of white people not liking and accepting the fact of white's and other people getting along with each other and others thinking the same. The rise of them was all of them thinking the same and the fall was to do with all people getting along with each other.
Chapter 3
1. What is “conventional wisdom?” What are some ways that “conventional wisdom” comes into being?
2. Explain why challenging the “conventional wisdom” with regard to a sticky social issue may be difficult to do.
3. Considering this chapter’s analysis of the transformation of Listerine from an antiseptic to a cure for halitosis, what can one conclude about the effect of advertising on market demand for a good or service?
4. Explain how the incentives of police departments and the public media gave rise to explanations of the rising crime rate in the 1980s that were totally wrong.
5. Describe, in general terms, the organizational structure of the Black Disciples street gang. How is it similar to the organizational structure of most business?
6. Explain how four years of financial records of the Black Disciples street gang found their way into the hands of a University of Chicago graduate student.
7. How did J.T., a branch leader of a Black Disciples street gang, acquire and maintain a regional monopoly over crack cocaine within the territorial domain of the gang?
8. What are monthly costs incurred by J.T.’s unit of the Black Disciples? Which costs would be considered fixed costs? Which would be considered variable costs?
9. Explain how a “tournament” or “winner take all” labor market works.Why would a street-level drug dealer be willing to accept low pay and poor working conditions?
10. Give your own examples of a “tournament” type of labor market.
11. How do the incentives of the street-level drug salesman differ from those of the gang leader/ franchise owner? Are they both attempting to maximize the profits of the gang? Why or why not?
12. How did the invention of crack cocaine transform the urban street gang?
13. According to the data cited in this chapter, civil rights laws and a shift in the attitudes in the United States regarding race helped to improve the status of black society. How did crack cocaine alter that progress?
14. Based on the examples in this chapter, what does the invention of better and cheaper production methods do to the price and sales of a good or service?
2. Explain why challenging the “conventional wisdom” with regard to a sticky social issue may be difficult to do.
3. Considering this chapter’s analysis of the transformation of Listerine from an antiseptic to a cure for halitosis, what can one conclude about the effect of advertising on market demand for a good or service?
4. Explain how the incentives of police departments and the public media gave rise to explanations of the rising crime rate in the 1980s that were totally wrong.
5. Describe, in general terms, the organizational structure of the Black Disciples street gang. How is it similar to the organizational structure of most business?
6. Explain how four years of financial records of the Black Disciples street gang found their way into the hands of a University of Chicago graduate student.
7. How did J.T., a branch leader of a Black Disciples street gang, acquire and maintain a regional monopoly over crack cocaine within the territorial domain of the gang?
8. What are monthly costs incurred by J.T.’s unit of the Black Disciples? Which costs would be considered fixed costs? Which would be considered variable costs?
9. Explain how a “tournament” or “winner take all” labor market works.Why would a street-level drug dealer be willing to accept low pay and poor working conditions?
10. Give your own examples of a “tournament” type of labor market.
11. How do the incentives of the street-level drug salesman differ from those of the gang leader/ franchise owner? Are they both attempting to maximize the profits of the gang? Why or why not?
12. How did the invention of crack cocaine transform the urban street gang?
13. According to the data cited in this chapter, civil rights laws and a shift in the attitudes in the United States regarding race helped to improve the status of black society. How did crack cocaine alter that progress?
14. Based on the examples in this chapter, what does the invention of better and cheaper production methods do to the price and sales of a good or service?
2. Explain Stetson Kennedy’s role in the Klan’s ultimate decline in popularity in the South, focusing on the role the dissemination of what the Klan believed was secret information played in that process.
He gave people a reason not to agree with the Klan and it worked
3. Explain what is meant by the term “information asymmetries” and give examples of information asymmetries we encounter in everyday life.
It deals with the study of decisions in transactions where one party has more or better information than the other, Adverse selection and moral hazzard
4. Explain whether, and if so, how, information asymmetries create a competitive advantage for particular individuals.
Its like deciding for insurence you may have to choose between two and one of them has better information.
5. Explain how such innovations as the Internet have affected the prevalence
of information asymmetries.
It gives them information so they can decide easily what they want.
6. Explain how information asymmetries facilitated the corporate scandals that occurred
in the early 2000s.
They had to choose a option between one or two choices and they picked one of them
They had to choose a option between one or two choices and they picked one of them
7.
They can fear both choices that there are to make and possibly choose the wrong choice.
8. What evidence do the authors offer to support their claim that real estate agents exploit an information asymmetry to their client’s detriment? As more clients become aware of the possibility of such behavior by agents, how might it affect the relationship between the two?
9. Explain how the choice of terms a real estate agent uses to describe a particular property conveys
additional information about the property, and hence the price a potential buyer might be able to successfully offer the seller.
10. This chapter examines how the economic incentives of a real estate agent may differ from those of his or her client.What other subject matter experts are often hired by individuals and businesses? Might they have incentives that differ from those of the clients that hire them?
11. Explain how the information a person has can affect his/her propensity to discriminate. As part of your explanation, distinguish between taste-based discrimination and information-based discrimination.
12. According to the voting data from the Weakest Link, which two groups of people are most likely to be discriminated against in that setting.What type of discrimination is being practiced in each case? Explain.
13. What do the data say about the characteristics of men and women who participate in Internet dating sites relative to the characteristics of the broader population?
14. Assuming many of the people who use Internet dating sites are not being truthful when they describe themselves, what could motivate them to do so, knowing that if they ever actually met a date face-to-face, the truth would likely come out?
Provide examples that illustrate how the combination of an information asymmetry and fear can lead to inefficient outcomes. Explain how the introduction of the element of fear makes the problem of the information asymmetry even worse.
additional information about the property, and hence the price a potential buyer might be able to successfully offer the seller.
10. This chapter examines how the economic incentives of a real estate agent may differ from those of his or her client.What other subject matter experts are often hired by individuals and businesses? Might they have incentives that differ from those of the clients that hire them?
11. Explain how the information a person has can affect his/her propensity to discriminate. As part of your explanation, distinguish between taste-based discrimination and information-based discrimination.
12. According to the voting data from the Weakest Link, which two groups of people are most likely to be discriminated against in that setting.What type of discrimination is being practiced in each case? Explain.
13. What do the data say about the characteristics of men and women who participate in Internet dating sites relative to the characteristics of the broader population?
14. Assuming many of the people who use Internet dating sites are not being truthful when they describe themselves, what could motivate them to do so, knowing that if they ever actually met a date face-to-face, the truth would likely come out?
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