FINAL EXAM, Fall 1998
I. Name That Concept (18 points)
Below are a series of quotes from recent media sources. For each, identify the concept
from the course (e.g., "market failure;" "dominant strategy") that
relates to the
content of the quote, and briefly define the concept. An example follows:
In 1935, Benito Mussolini invaded Ethiopia. This was regarded as an
affront to collective security--and it had to be repelled. As a result, the
League of Nations held countless meetings as to the appropriate response.
At the end of each day there was a press briefing. These meetings went on
week after week. Finally, at one of the briefings one of the reporters
summarized what had happened: ''On the surface, very little is happening.
But beneath the surface, nothing is happening.''
This quote identifies a collective action problem, and you would then offer a brief
definition/explanation of the concept.
A. "Fox said majority votes have all come from justices whose campaign funds received
the largest contributions from trial lawyers - Alice Robie Resnick, $ 261,033; Andrew
Douglas, $ 204,408; Francis Sweeney, $ 183,523; and Paul Pfeifer, $ 132,523. She said
those voting in the minority received trial lawyer contributions at much lower levels.
Chief Justice Thomas J. Moyer received $ 22,092, and Justices Deborah Cook and
Evelyn Stratton received $ 25,792 and $ 13,320, respectively."
The Columbus Dispatch
B. "Access competition (in the telecommunications industry) is a fight between rival,
non-connecting communications networks for the largest possible subscriber group. The
user benefits as more fellow users are connected. Thus networks have incentives to build
the largest possible subscriber universe."
C. Since March 1995, Swansea Project Playground has tried to raise the dollars necessary
to give town children their own place to play, on town land near the basketball courts on
Milford Road. Fundraising has been tough for the group, made up of eight core members
determined to give the town a playground.
... Now, they're trying to get residents and
businesses to buy customized bricks, engraved with personal messages, which would
form the playground walkway. Of the 7,000 order forms mailed to town residents
recently, only 70 were returned. "It seems like such a simple matter," Clegg said. "We
thought we'd sell these in no time at all. When you only get a 1 percent return, it's
The Providence Journal-Bulletin
D. "What if the real value for this crucial probability is far, far smaller? What if, in fact,
the probability of life appearing in any one suitable home is tiny in relation to the number
of suitable homes available? Now the answer to our question changes. Instead of the
probability approaching 1, it can just as easily approach 0. By adjusting the value of the