Chapter 1 What Do Schoolteachers and Sumo Wrestlers Have in

Chapter 1 What Do Schoolteachers and Sumo Wrestlers Have in Common?
1. Briefly describe what we mean by the word “incentive” as it is used in economic analysis.
Give examples to illustrate your answer.
2. How does a moral incentive differ from an economic incentive?
3. Referring to the example in the book regarding the day-care center and the problem of parents
picking up their children late, why did charging a fee to parents for picking up children late cause
parental tardiness to increase?
4. According to Freakonomics, economics is the study of incentives. Explain this statement.
5. Does a string of correct answers on a test, duplicated by several students in the same class,
prove the teacher is cheating? Why or why not?
6. Why did some Chicago public school teachers cheat to increase their students’
test scores?
7. Briefly, how did Levitt arrive at the conclusion that some sumo wrestlers were cheating?
8. Explain, using economic principles, why Levitt expected cheating to be more likely when a
wrestler on the bubble, i.e., with a 7-7 record, was competing against a wrestler with an 8-6 record
than when the same wrestler was competing with someone with a 10-4 record.
9. Referring to Paul Feldman’s bagel business, use economic principles to explain why cheating
would be more likely in an office with a few hundred employees than it would be in an office with a
few dozen employees.