Anthony and Addie are playing the ultimatum game, starting with $100 . The coin flip results in Anthony being the one to propose a division of the $100 . Anthony proposes that he gets $99 and Addie gets $1 . Which of the following statements is correct?
a. Because the 99-1 split isn't fair, Anthony should not make this offer.
b. Conventional economic theory predicts that Anthony will propose a 99-1 split, just as he did.
c. Experimental evidence suggests that Addie will accept the 99-1 split because, even though it isn't fair, it's better than nothing.
d. Economic theory predicts that Anthony should choose a 60-40 split to maximize his payoff.
b
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Which statement best illustrates the concept of diminishing marginal utility?
A. Some consumers will receive less satisfaction from consuming pizza than from consuming hamburgers. B. As one consumes more slices of pizza for lunch, one would be willing to pay a higher price for additional slices. C. A typical consumer will receive less satisfaction from consuming the third slice of pizza for lunch than from the second slice. D. A decrease in the price of slices of pizza will cause consumers to buy more slices for lunch, because they can afford to buy more.
Wealth and substitution effects explain why the aggregate demand curve has a positive slope
Indicate whether the statement is true or false
If the current account is in surplus and the capital account is zero, then
A) net exports must be positive. B) the balance of payments must be in surplus. C) the financial account must be in deficit. D) there is a capital inflow.
Total deadweight loss in society is reduced through rent seeking by monopolists
a. True b. False