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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 3: Thermostats, Lemons, and Other Families of Models.

Multiple Choice Questions

1. What does Schelling compare to the process of tracking the circulation of money in an economy?
(a) Rumors circulating.
(b) The development and use of language.
(c) Water's movement from the ocean to clouds to rivers to the ocean.
(d) Musical chairs.

2. What additional reason does Schelling give for the desire to sit in the back of a theater?
(a) People want to be prepared to flee.
(b) People want to be far from the stage.
(c) People want to feel safe in the dark.
(d) People want to watch people arrive.

3. How does Schelling describe the system of skiers going up a lift and coming down the trails?
(a) As an open system.
(b) As a transformative system.
(c) As a static system.
(d) As a closed system.

4. What does the critical mass provide for the individual?
(a) A plausible excuse.
(b) Safety in numbers.
(c) Deniability.
(d) Confidence that he is right.

5. What does Schelling say about a bike owner buying a bike for $90 and selling it for $150?
(a) He says that the owner still has to pay overhead, so the exchange is equal.
(b) He says that the exchange replaces a real bicycle with abstract money.
(c) He says that the exchange is consistent with laws of capitalism.
(d) He says that the owner gains a profit of $60.

Short Answer Questions

1. What is the second thing Schelling says a social behavior model can be?

2. What does Schelling say social conventions mediate between?

3. What do the laws visible in the human behavior Schelling describes lead you to expect in other cyclic processes?

4. What does Schelling say a doctor administering measles vaccines found, that illustrates the human behavior Schelling is describing?

5. What natural phenomenon does Schelling compare the economy to?

(see the answer key)

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