________ paradox: the failure of majority rule to produce transitive preferences for society.
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Arrows impossibility theorem
________: a mathematical result showing that, under certain assumed conditions, there is no scheme for aggregating individual preferences into a valid set of social preferences.
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Signals
________ must be less costly to the person with the higher- quality product.
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Politicians
________ have motivations, selfish and selfless.
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Consumption saving decisions
________ are examples of inconsistency.
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Principal
________: a person for whom another person, called the agent, performs some act.
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Adverse selection
________: the tendency for the mix of unobserved attributes to become undesirable from the standpoint of an uninformed party.
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C
Transitivity: If A beats B, and B beats ________, then A should beat ________.
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Higher wages
________ incentivize workers to work higher.
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Asymmetric information
________: some people are more informed than others, affecting how they make choices and how they interact with each other.
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Homo economicus
________ refers to human organisms that are always rational, which is studied in economic theory.
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Behavioral economics
________: the subfield of economics that integrates the insights of psychology.
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Political economy
________: (also known as a public choice) the study of government using the analytic methods of economics.
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14
Political economy
________: how markets fail and how government policy can potentially improve situations.
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Flashcard (40)