In the ultimatum game, allocators usually offer recipients at least a 40 percent share of the money, and recipients almost always reject offers of less than a 10 percent share. Which of the following does not explain why allocators offer recipients a
relatively generous share and why recipients reject meager offers?
A) Fear of arousing outrage and abhorrence could influence economic decisions.
B) People can and often do reject offers that offend their sense of fairness even if doing so means taking a monetary loss.
C) Some people are careful not to engage in economic behavior that might offend and alienate others.
D) Allocators can count on recipients to ignore all considerations except financial benefit.
Answer: D
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Big Woods is a lumber firm that sells plywood sheets to local builders. If the annual holding cost of a sheet of plywood is $8 and the managers of Big Woods order 700 sheets of plywood, what is the total annual carrying costs of the inventory?
A) $2,800 B) $5,600 C) $2,000 D) $6,000
The Federal Reserve
A. is not legally authorized to monitor or regulate complicated financial derivatives. B. should not have promoted the use of complicated financial derivatives the way it did during the financial crisis. C. did not pay close enough attention to derivatives in the period leading up to the financial crisis. D. could have prevented the financial crisis through the use of complicated financial derivatives.
GDP generally reflects the production of social ills such as pollution.
Answer the following statement true (T) or false (F)
Alex, who is risk-neutral, is looking for a one-bedroom apartment to rent for the month of August while he's on vacation in Seattle. All of the one-bedroom apartments in the neighborhood where he wants to stay are of equal quality, but 70 percent rent for $700 per month, 20 percent rent for $600 per month, and 10 percent rent for $500 per month. The first apartment Alex finds rents for $700 per month. If the cost to Alex of searching for an apartment is $30, then searching for another apartment is a gamble with an expected value of:
A. $20. B. $40. C. $0. D. $10.