7. Which of the following are true about altruism? (a) Altruism does not affect competitive-equilibrium prices. (b) Altruism does not affect competitive-equilibrium quantities. (c) Altruism increases moral hazard in partnerships. (d) Altruism decreases moral hazard in partnerships. (e) Altruism can explain why people cooperate in the Prisoner's Dilemma.

2.Which of the following statements are true? a) When an Insurance company sets different premia for men and women, who are otherwise similar, just because they have different death rates, this is evidence to conclude that there is statistical discrimination. b) A black driver is 7.7 times more likely to be searched on US highways than a white driver. This is enough evidence to conclude there is taste based discrimination. c) A black driver is 7.7 times more likely to be searched on US highways than a white driver. This is enough evidence to conclude there is statistical discrimination. d) If hit rates for Blacks and Whites are the same, this can be interpreted as evidence that there is no statistical discrimination at play. e) If hit rates for Hispanics and Whites are very different that can be interpreted as evidence that there is taste based discrimination at play.

3.Which of the following statements are true? a) Moral hazard is the opportunism by an individual that arises when another concerned individual cannot observe his/her action. b) Moral hazard arises when an individual knows something that another does not, one example in which this arises is in the used car markets, when sellers know better about their cars than buyers do. c) To decrease moral hazard problems, the Principal should give the agent some share in the output produced. d) To decrease moral hazard problems, the Principal should give the agent some compensation which is not related to the level of output produced. e) Moral hazard problems reduce the profits that a firm can make by making workers choose inefficient levels of effort.