Read this excerpt from Levitt and Dubner’s Freakonomics. The incentive scheme that rules sumo is intricate and extraordinarily powerful. Each wrestler maintains a ranking that affects every slice of life; how much money he makes, how large an entourage he carries, how much he gets to eat, sleep, and otherwise take advantage of his success. The sixty-six highest-ranked wrestlers in Japan, comprising the makuuchi and juryo divisions, make up the sumo elite. A wrestler near the top of this elite pyramid may earn millions and is treated like royalty. Any wrestler in the top forty earns at least $170,000 a year. The seventieth-ranked wrestler in Japan, meanwhile, earns only $15,000 a year. Life isn’t very sweet outside the elite. Low-ranked wrestlers must tend to their superiors, preparing their meals and cleaning their quarters and even soaping up their hardest-to-reach body parts. So ranking is everything.A wrestler’s ranking is based on his performance in the elite tournaments that are held six times a year. Each wrestler has fifteen bouts per tournament, one per day over fifteen consecutive days. If he finishes the tournament with a winning record (eight victories or better), his ranking will rise. If he has a losing record, his ranking falls. If it falls far enough, he is booted from the elite rank entirely. The eighth victory in any tournament is therefore critical, the difference between promotion and demotion; it is roughly four times as valuable in the rankings as the typical victory.Based on the excerpt, which statement provides the best example of incentive for a sumo wrestler to cheat?
Read the following excerpt from E. O. Wilson’s “The Environmental Ethic.”It is also easy to overlook the services that ecosystems provide humanity. They enrich the soil and create the very air we breathe. Without these amenities, the remaining tenure of the human race would be nasty and brief. The life-sustaining matrix is built of green plants with legions of microorganisms and mostly small, obscure animals—in other words, weeds and bugs. Such organisms support the world with efficiency because they are so diverse, allowing them to divide labor and swarm over every square meter of the earth’s surface. They run the world precisely as we would wish it to be run, because humanity evolved within living communities and our bodily functions are finely adjusted to the idiosyncratic environment already created. The author tries to persuade the reader to agree with his claim about the importance of ecosystems by
Read this excerpt from Levitt and Dubner’s Freakonomics. The incentive scheme that rules sumo is intricate and extraordinarily powerful. Each wrestler maintains a ranking that affects every slice of life; how much money he makes, how large an entourage he carries, how much he gets to eat, sleep, and otherwise take advantage of his success. The sixty-six highest-ranked wrestlers in Japan, comprising the makuuchi and juryo divisions, make up the sumo elite. A wrestler near the top of this elite pyramid may earn millions and is treated like royalty. Any wrestler in the top forty earns at least $170,000 a year. The seventieth-ranked wrestler in Japan, meanwhile, earns only $15,000 a year. Life isn’t very sweet outside the elite. Low-ranked wrestlers must tend to their superiors, preparing their meals and cleaning their quarters and even soaping up their hardest-to-reach body parts. So ranking is everything.A wrestler’s ranking is based on his performance in the elite tournaments that are held six times a year. Each wrestler has fifteen bouts per tournament, one per day over fifteen consecutive days. If he finishes the tournament with a winning record (eight victories or better), his ranking will rise. If he has a losing record, his ranking falls. If it falls far enough, he is booted from the elite rank entirely. The eighth victory in any tournament is therefore critical, the difference between promotion and demotion; it is roughly four times as valuable in the rankings as the typical victory.Based on the excerpt, which of the following statements best summarizes the incentive system that ranks sumo wrestlers?
Read the following excerpt from E. O. Wilson’s “The Environmental Ethic.”Species are disappearing at an accelerating rate through human action, primarily habitat destruction but also pollution and the introduction of exotic species into residual natural environments. I have said that a fifth or more of the species of plants and animals could vanish or be doomed to early extinction by the year 2020 unless better efforts are made to save them. . . . As the last forests are felled [destroyed] in forest strongholds like the Philippines and Ecuador, the decline of species will accelerate even more. In the world as a whole, extinction rates are already hundreds or thousands of times higher than before the coming of man. They cannot be balanced by new evolution in any period of time that has meaning for the human race.Why should we care? What difference does it make if some species are extinguished, if even half of all the species on earth disappear? Let me count the ways. New sources of scientific information will be lost. Vast potential biological wealth will be destroyed. Still undeveloped medicines, crops, pharmaceuticals, timber, fibers, pulp, soil-restoring vegetation, petroleum substitutes, and other products and amenities will never come to light. Based on the excerpt, which statement best summarizes the author’s beliefs about the disappearing species?
Read the following excerpt from Levitt and Dubner’s Freakonomics.A key fact of white-collar crime is that we hear about only the very slim fraction of people who are caught cheating. Most embezzlers lead quiet and theoretically happy lives; employees who steal company property are rarely detected.With street crime, meanwhile, that is not the case. A mugging or a burglary or a murder is usually tallied whether or not the criminal is caught. A street crime has a victim, who typically reports the crime to the police, who generate data, which in turn generate thousands of academic papers by criminologists, sociologists, and economists. But white-collar crime presents no obvious victim.In this excerpt, the authors present
Read the following excerpt from Levitt and Dubner’s Freakonomics.He also believes that employees further up the corporate ladder cheat more than those down below. He got this idea after delivering for years to one company spread out over three floors—an executive floor on top and two lower floors with sales, service, and administrative employees (Feldman wondered if perhaps the executives cheated out of an overdeveloped sense of entitlement. What he didn’t consider is that perhaps cheating was how they got to be executives.)Which best describes the type of reasoning the excerpt uses?
Read the following excerpt from Levitt and Dubner’s Freakonomics.When he started his business, he expected a 95 percent payment rate, based on the experience at his own office. But just as crime tends to be low on a street where a police car is parked, the 95 percent rate was artificially high: Feldman’s presence had deterred theft. Not only that, but those bagel eaters knew the provider and had feelings (presumably good ones) about him. A broad swath of psychological and economic research has shown that people will pay different amounts for the same item depending on who is providing it. . . .In the real world, Feldman learned to settle for less than 95 percent. He came to consider a company “honest” if its payment rate was above 90 percent. He considered a rate between 80 and 90 percent “annoying but tolerable.” The excerpt helps the authors arrive at their conclusion by
Read the excerpt from Levitt and Dubner’s Freakonomics.There is a tale, “The Ring of Gyges,” that Feldman sometimes tells his economist friends. It comes from Plato’s Republic. A student named Glaucon offered the story in response to a lesson by Socrates—who, like Adam Smith, argued that people are generally good even without enforcement. Glaucon, like Feldman’s economist friends, disagreed. He told of a shepherd named Gyges who stumbled upon a secret cavern with a corpse inside that wore a ring. When Gyges put on the ring, he found that it made him invisible. With no one able to monitor his behavior, Gyges proceeded to do woeful things—seduce the queen, murder the king, and so on. Glaucon’s story posed a moral question: could any man resist the temptation of evil if he knew his acts could not be witnessed? Glaucon seemed to think the answer was no. But Paul Feldman sides with Socrates and Adam Smith—for he knows the answer, at least 87 percent of the time, is yes.The example in the excerpt helps the authors arrive at which of the following conclusions?
Read the following excerpt from Levitt and Dubner’s Freakonomics.Despite all the attention paid to rogue companies like Enron, academics know very little about the practicalities of white-collar crime. The reason? There are no good data. A key fact of white-collar crime is that we hear about only the very slim fraction of people who are caught cheating. Most embezzlers lead quiet and theoretically happy lives; employees who steal company property are rarely detected.With street crime, meanwhile, that is not the case. A mugging or a burglary or a murder is usually tallied whether or not the criminal is caught. A street crime has a victim, who typically reports the crime to the police, who generate data, which in turn generate thousands of academic papers by criminologists, sociologists, and economists. But white-collar crime presents no obvious victim. From who, exactly, did the masters of Enron steal? And how can you measure something if you don’t know to whom it happened, or with what frequency, or in what magnitude?The excerpt helps the authors support their conclusion by
Read the excerpt from Levitt and Dubner’s Freakonomics.In the beginning, Feldman left behind an open basket for the cash, but too often the money vanished. Then he tried a coffee can with a money slot in its plastic lid, which also proved too tempting. In the end, he resorted to making small plywood boxes with a slot cut into the top. The wooden box has worked well. Each year he drops off about seven thousand boxes and loses, on average, just one to theft. This is an intriguing statistic: the same people who routinely steal more than 10 percent of his bagels almost never stoop to stealing his money box—a tribute to the nuanced social calculus of theft. From Feldman’s perspective, an office worker who eats a bagel without paying is committing a crime; the office worker probably doesn’t think so. This distinction probably has less to do with the admittedly small amount of money involved (Feldman’s bagels cost one dollar each, cream cheese included) than with the context of the “crime.” The same office worker who fails to pay for his bagel might also help himself to a long slurp of soda while filling a glass in a self-serve restaurant, but he is very unlikely to leave the restaurant without paying.Which of the following best summarizes the main idea of this paragraph?
Read the following excerpt from Levitt and Dubner’s Freakonomics.Driving around the parks that encircle Washington, he solicited customers with a simple pitch: early in the morning, he would deliver some bagels and a cash basket to company’s snack room; he would return before lunch to pick up the money and the leftovers. It was an honor-system commerce scheme, and it worked. Within a few years, Feldman was delivering 8,400 bagels a week to 140 companies and earning as much as he had ever made as a research analyst. He had thrown off the shackles of cubicle life and made himself happy.Based on the excerpt, which statement best strengthens Feldman’s claim that people are mostly honest?
Read the excerpt from Levitt and Dubner’s Freakonomics.If morality represents the way we would like the world to work and economics represents how it actually does work, then the story of Feldman’s bagel business lies at the very intersection of morality and economics. Yes, a lot of people steal from him, but the vast majority, even though no is watching over them, do not. This outcome may surprise some people—including Feldman’s economist friends, who counseled him twenty years ago that his honor-system scheme would never work. But it would not have surprised Adam Smith. In fact, theme of Smith’s first book, the Theory of Moral Sentiments, was the innate honesty of mankind. “How selfish soever man may be supposed,” Smith wrote, “there are evidently some principles in his nature which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it.”Which best describes the authors’ purpose in using a quotation from Adam Smith’s book The Theory of Moral Sentiments?
Read the following excerpt from Levitt and Dubner’s Freakonomics.So what do the bagel data have to say? In recent years, there have been two noteworthy trends in the overall payment rate. The first was a long, slow decline that began in 1992. By the summer of 2001, the overall rate had slipped to about 87 percent. But immediately after September 11 of that year the rate spiked a full 2 percent and hasn’t slipped much since. (If a 2 percent gain in payment doesn’t sound like much, think of it this way: the nonpayment rate fell from 13 to 11 percent, which amounts to a 15 percent decline in theft.) Because many of Feldman’s customers are affiliated with national security, there may have been a patriotic element to the 9/11 Effect. Or it may have represented a more general surge in empathy.The excerpt serves as which type of support for the authors’ argument?
Read the following excerpt from Levitt and Dubner’s Freakonomics.There is a tale, “The Ring of Gyges,” that Feldman sometimes tells his economist friends. It comes from Plato’s Republic. A student named Glaucon offered the story in response to a lesson by Socrates—who, like Adam Smith, argued that people are generally good even without enforcement. Glaucon, like Feldman’s economist friends, disagreed. He told of a shepherd named Gyges who stumbled upon a secret cavern with a corpse inside that wore a ring. When Gyges put on the ring, he found that it made him invisible. With no one able to monitor his behavior, Gyges proceeded to do woeful things—seduce the queen, murder the king, and so on. Glaucon’s story posed a moral question: could any man resist the temptation of evil if he knew his acts could not be witnessed? Glaucon seemed to think the answer was no. The excerpt serves as which of the following in relation to the authors’ argument?
Read the following excerpt from Levitt and Dubner’s Freakonomics.He had also—quite without meaning to—designed a beautiful economic experiment. From the beginning, Feldman kept rigorous data on his business. So by measuring the money collected against the bagels taken, he found it possible to tell, down to the penny, just how honest his customers were. Did they steal from him? If so, what were the characteristics of a company that stole versus a company that did not? Under what circumstances did people tend to steal more, or less?Based on the excerpt, which of the following best explains why the authors included Feldman in their study?
Read the excerpt from Levitt and Dubner’s Freakonomics.Feldman has also reached some of his own conclusions about honesty, based more on his experience than the data. He has come to believe that morale is a big factor—that an office is more honest when the employees like their boss and their work. He also believes that employees further up the corporate ladder cheat more than those down below. He got this idea after delivering for years to one company spread out over three floors—an executive floor on top and two lower floors with sales, service, and administrative employees. (Feldman wondered if perhaps the executives cheated out of an overdeveloped sense of entitlement. What he didn’t consider is that perhaps cheating was how they got to be executives.)Which idea from the excerpt best addresses the counterclaim that people are only honest when there is a financial incentive?
Read the following excerpt from Levitt and Dubner’s Freakonomics.The data also show that smaller offices are more honest than big ones. An office with a few dozen employees generally outpays by 3 to 5 percent an office with a few hundred employees. This may seem counterintuitive. In a bigger office, a bigger crowd is bound to convene around the bagel table, providing more witnesses to make sure you drop your money in the box. But in the big-office/small-office comparison, bagel crime seems to mirror street crime. There is far less street crime per capita in rural areas than in cities, in large part because a rural criminal is more likely to be known (and therefore caught). Also, a smaller community tends to exert greater social incentives against crime, the main one being shame.Which idea from this paragraph supports the claim that “smaller offices are more honest than big ones”?
Read the following excerpt from Levitt and Dubner’s Freakonomics.As it happens, Feldman’s accidental study provides a window onto a form of cheating that has long stymied academics: white-collar crime. (Yes, shorting the bagel man is white-collar crime, writ however small.) It might seem ludicrous to address as large and intractable a problem as white-collar crime through the life of a bagel man. But often a small and simple question can help chisel away at the biggest problems.Despite all the attention paid to rogue companies like Enron, academics know very little about the practicalities of white-collar crime. The reason? There are no good data. A key fact of white-collar crime is that we hear about only the very slim fraction of people who are caught cheating. Most embezzlers lead quiet and theoretically happy lives; employees who steal company property are rarely detected.What purpose does the “bagel man” serve in this argument?
Which of the following statements support the claim in Freakonomics that “people are generally good even without enforcement”?
Read the following excerpt from Levitt and Dubner’s Freakonomics.In the beginning, Feldman left behind an open basket for the cash, but too often the money vanished. Then he tried a coffee can with a money slot in its plastic lid, which also proved too tempting. In the end, he resorted to making small plywood boxes with a slot cut into the top. The wooden box has worked well. Each year he drops off about seven thousand boxes and loses, on average, just one to theft. This is an intriguing statistic: the same people who routinely steal more than 10 percent of his bagels almost never stoop to stealing his money box—a tribute to the nuanced social calculus of theft. From Feldman’s perspective, an office worker who eats a bagel without paying is committing a crime; the office worker probably doesn’t think so. This distinction probably has less to do with the admittedly small amount of money involved (Feldman’s bagels cost one dollar each, cream cheese included) than with the context of the “crime.” The same office worker who fails to pay for his bagel might also help himself to a long slurp of soda while filling a glass in a self-serve restaurant, but he is very unlikely to leave the restaurant without paying.Which of the following best summarizes the main idea of this paragraph?
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