Answer the following questions in separate paragraphs. For each question you must reference the text at least once.
Chapter 1: What is an incentive? How does it relate to the study of economics?
Chapter 2: Provide examples that illustrate how asymmetry of information can lead to inefficient outcomes.
Explain how the introduction of the element of fear makes the problem of information asymmetry even worse.
Chapter 3: Based on the examples in the chapter, what does the invention of better and cheaper production methods do to the price and sale of a good or a service?
Chapter 4: The arguments linking the drop in crime to the robust economy in the 1990’s would seem to be quite strong. Provide a brief explanation of what evidence the data provides about the viability of this explanation. What explanation do the authors provide?
Chapter 5: Describe the difference between normative and positive analysis. What can you learn about the utility of this distinction from this chapter on perfect parenting?
Chapter 6: What does the data provided on baby names in California tell us about the socioeconomics of naming children?
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