Tuesday, March 21, 2006

Three questions

An MIT professor came up with three questions that, according to SmartMoney magazine, "seems to predict whether you will be good at things like managing money".

You can find the three questions all over the web, but here they are directly from professor Shane Frederick -- give yourself 90 seconds:

  1. A bat and a ball cost $1.10 in total. The bat costs $1.00 more than the ball. How much does the ball cost? _____ cents
  2. If it takes 5 machines 5 minutes to make 5 widgets, how long would it take 100 machines to make 100 widgets? _____ minutes
  3. In a lake, there is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire lake, how long would it take for the patch to cover half of the lake? _____ days

The explanation of the questions, and interpretation of the answers, are on page 27 (the third page of the pdf file) of "Cognitive reflection and decision making", Journal of Economic Perspectives, Fall 2005. While you are looking at the pdf file, check out Table 1 on page 29 (fifth page of the pdf file). It shows the results of administering the test to students at nine universities. Yikes :)