Questions by ggorczany - Page 27
ASAP TO RATE HIGHER4. Answer the following two questions:4.1 A newly hired engineer for a computer firm in the Boston metropolitan area has four years experience and good all-around qualifications. When asked to estimate the starting salary for this employee, my secretary (knowing very little about the profession or the industry) guessed an annual salary of $65,000. What is your estimate? $______________4.2 Is the population of Burkina Faso greater than 45 million?What's your best estimate of Burkina Fasos population? __________ million.Another group answered question 4.1, but this time the question presented a much higher number instead ($130,000) and peoples estimates were very close to $130,000 and diverged significantly from the first group.The other group also answered question 4.2, but in their version the number presented was 5 million, much smaller. Again, their estimates were very close to 5 million and diverged significantly from the first group.Given neither the secretarys estimate (knows little about the profession/industry) nor the population number in the question has any credibility, why do you think peoples estimates were very close to the given numbers and diverged significantly? Identify and explain the decision bias that explains the results in this question.5.The U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs are proposed. Which one would you favor?A first group was given the first formulation of the alternative programs:If program A is adopted, 200 people will be saved. % 72If program B is adopted, there is 1/3 probability that 600 people will be saved, and 2/3 probability that no one will be saved. % 28A second group was given the cover story with the following formulation of the alternative programs:If program A is adopted, 400 people will die. % 22If program B is adopted, there is 1/3 probability that nobody will die, and 2/3 probability that 600 people will die. % 78Which program (A or B) is the riskier one? Why do you think peoples choices, hence risk taking behavior, changed even though the programs are almost identical (except a single word). Identify and explain the decision bias that explains the results in this question?6.As the president of an airline company, you have invested 9 million dollars of the companys money into a research project. The purpose was to build a plane that would not be detected by conventional radar, in other words, a radar-blank plane. When the project is 90% completed, another firm begins marketing a plane that cannot be detected by radar. Also, it is apparent that their plane is much faster and far more economical than the plane your company is building. The question is: should you invest the last 1 million (10%) of the research funds to finish your radar-blank plane?Use the following 0 to 100 scale and write a number between 0 and 100 that reflects what you think your planes chance of financial success really is. You can use any number."0% 100%"No Chance" "Sure thing"In a different version of this question, when people faced negative consequences as a result of their initial investment, they were more likely to invest the remaining funds if the initial investment was larger compared to when it was smaller. Identify and explain the decision bias reflecting peoples tendency to become more committed to a failing course of action.
Select the correct text in the passage.Which sentence best shows that Ostrom caused a major shift in how economists approach a particular subject?A Nobel Prize Winner's Novel IdeaIn 2009, Indiana University professor Elinor Ostrom became the first woman to win the Nobel Prize in economics. Ostrom received thisInternational honor "for her analysis of economic governance, especially the commons." In her scholarly work, Ostrom skillfully appliedeconomic principles to show how people can share and preserve Earth's limited resources peacefully.When people must share limited resources, such as water or farmland, it can be difficult for them to avoid conflict with one another. Ostrom'sresearch showed how groups can work together to manage these resources through collective property rights. This economic principle refers topeople owning land and other property as a group rather than as individuals.Until Ostram came along the idea of the "tragedy of the commons" was widely accepted by scholars. According to this idea, people competingfor resources will always put their own self-interests above the good of the community. Ostrom demonstrated that when people share acommon resource, the tragedy of the commons is not the only possible outcome, or even the most likely outcome. She showed that people candevelop their own systems without outside regulation. She also affirmed that people can work on their own to build trust with each other in away that is mutually beneficial. Ostrom stated, "Now I've seen in laboratory settings and the field settings that most individuals are nuancedbeings (who] can have real preferences about the welfare of others. If presented a situation where they can evolve trust and reciprocity, theywill do so."Source: National Institutes of HealthResetNext2020 Edmentum. All rights reserved.