FREAKONOMICS

 ch 1 questions & answers

       1.) explain how the imposition of a fine for tardy at a day care center may have altered the
            motivations of these parents ?
         A: Parents subsequently reassed the benefits & cost and decided that the price was worth
             the extra time .

        2.) what is a incentive ? how does it relate to the study of economics ?
         A: a incentive is something that tends to incite the action or greater effort .

        3.) what examples can you think of where moral or social incentives and economic incentives
             are both present ?
         A: a example that moral and social incentives and economic incentives for being present is the
             market place . the stronger incentive is moral incentives .

         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 ?
           A: some ways the school teacher might be able to improve the score of his or her students on a
                standardized test is studying harder with out having the teacher substitute the right answers
              which is cheating .
    
          5.) how has a well motivated and seemingly benign government requirement to administer
               standardized tests to grade school students had unintended and malicious consequences?
             A: it was because the child left behind law awards schools that make progress on these
                 standardized test .

           6.) explain how levitt devised a means of examining student test scores to uncover evidence
                of cheating teachers .explain also why Levitts analysis of the data constituted evidence,
                but not proof , of cheating ?
              A: levitt had developed a computer algorithm to look for strings of suspicious answers on
                  standardized test . his analysis of data constituted evidence but was not proof evidence
                  revealed that teachers cheat by substituting the right answers on student tests .

7.) explain what incentives , if any , a university might have to artificially improve test scores and grades of its athletes .
A: some incentives that will help improve test scores for athletes are social incentives
 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 ?
A: sumo wrestlers are arranged from there weight class & the rank of the wrestler might change
 depending on how they perform in there matches .

9.) describe what it means for a japanese sumo wrestler to be " on the bubble " and what incentive
 s this wrestler and his opponent may have to " throw " a wrestling match ?
 A: what it means to be on the bubble is possibly there was a upset has happened & the incentive that may have his opponent throw his match would be either a moral or social incentive because of the sense of guilt of throwing the match .

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 ?
A: evidence that Levitt can construct of cheating among the wrestlers is he found a significant number of matches were rigged .

11.) how did paul feldman set up his bagel business in the washington , DC area ? how did it differ from most business models ?
A: Feldman set up his bagel business by being a entrepreneur

12.)what do the authors of freakonomics conclude from analysis of the paul Feldman's bagel sales data ? do these conclusions match with economist's expectations of human behavior ?
A: the author concludes that  his sales data is only high because the customers increase .

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 other to analyze ?
A: the analysis shows that they where cheating , this is usually a difficult subject because its hard to analyze if someone is cheating .

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 ?
A: what variables that affect the incidence of theft in the office setting is the incentives & regulations .

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 klans popularity to rise or fall ?
A:The Ku Klux Klan started out as just a circle of friend with like-minded views. Through the WWI and WWII the group was not none but after the KKK grew and started commiting volience.
2.)
A: he hated the klan . when he was studying the KKK he realized that no one really knew what the Klan was doing . So, to find out, he joined. After meetings, he would go home and write the passwords, events, and rankings of KKK members and give them out to union members, anti-KKK politicans, etc.
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.

3.). Explain what is meant by the term "information asymmetries" and give examples of information asymmetries we encounter in everyday life.

Infomation asymmetries are infomation that is not told (and may not even exist) but changed a person's decision. For example, if someone is selling a new car many people will assume that there is something wrong with it. This way not be the case, but nevertheless it becomes almost impossible for the seller to sell the car for its worth.

4. Explain whether, and if so, how, information asymmetries create a competitive advantage for particular individuals.

Using the lemon car example again it is possible that infomation asymmetries can be used as an advantage. If someone's car really was a lemon that infomation may never be disclosed and the buyer of the car will be cheated out of it's money.

5. Explain how such innovations as the Internet have affected the prevalence of information asymmetries.

The internet is home to a unlimited amount of infomation. Most of this infomation is bogus and untrue because anyone anywhere can write anything whether is it true or not. You can find multiple opinions and theories and any subject but finding facts is almost impossible.

6. Explain how information asymmetries facilitated the corporate scandals that occurred in the early 2000s.

Multiple big name businesses were conducting many "under the table" deals which came to light. Some of these including trading infomation about shares (which caused the scandal with Martha Stewart,) hidden memberships, disguised debt, and manipulation, These were all things that were happening but just weren't talked about (information asymmetries.)

7. 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.

Doctors can use their knowledge as an information asymmetry. They may know that you don't need a certain surgery but will use fear (like the fear of having heart attack) to "sell" you on the idea. You need this surgery to survive when really, you don't. This causes more money to be spent on unnecessary medical procedures and more money to pad the pocket of the doctor that sold it to you.

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?

A person trying to sell their house has two main fears: will I try and sell my house for least or far more then it is worth. So the logal solution is to hire a real estate agent an expert at selling homes. However, the real estate agent also uses that to her advantage by setting and selling the price that gives her the most profit. The internet however gets rid of this problem. Anyone can go online and do their own research on any home they want without realtors help.

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.

If an ad for a home uses general terms such as "fantastic" "spacious" or "great neighborhood" it is really covering up the fact that the house is not interesting and not worth buying. More descriptive words like "maple" "hardwood floors" and "state of the art" give you an idea of what is in the home and which makes it more appealing.

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?

Funeral directors are hired to give griefing familes final resting places for their loved ones. However, instead of showing the reasonably priced caskets they will show you the top of the line, very expensive caskets because it is good for business.

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.

taste-based discrimination - when someone just doesn't want to assoicate with a certain type of people
information-based discrimination - when someone feels that a certain type of person is not capable of doing something

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.

Elderly - taste-based - Regardless of their skill for the game elderly players were voted off on the fact that they don't want them around
Hispanics - information-based - Regardless of their skill for the game hispanic players were voted of on the opinion they are poor players

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?

Men and women on interest dating sites can do one of two things: 1. Try and be and truthful as possible to find someone they like or 2. Lie to seem more appealing. This can be very true of the broader popualtion as well.

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?

One thing could be knowing that if they ever actually met a date face-to-face, the truth would likely come out.