Terry wants to sell his car and the lowest price he is willing to accept is $3,000 . Alice likes the car and is willing to pay at most $4,000 for it. They begin to negotiate to arrive at a price. Which of the following statements will be true?
a. They are playing a zero-sum game.
b. The higher the price they agree on, the greater the benefit to both.
c. The longer they take to arrive at an agreed price, the lower the benefit to them.
d. They are playing a positive-sum game where their benefits add up to $1,000.
D
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Capital per person in India is about six percent and per capita income is about eight percent of the U.S. level. Given that per capita income y = A , calculate the level of total factor productivity (A), relative to the U.S
level, that would be needed for India to match the U.S. level of per capita income. ( = 0.43)
Neoclassical economists see no social ______________ to inflation and suggest that the government should take actions to control it.
a. drawback b. criticism c. benefit d. support
Briefly contrast the situation where losses will be the smallest for a perfectly competitive firm based on total revenues with another situation where losses for a perfectly competitive firm will be smallest based on marginal revenue
Arbitrage occurs when an entity purchases a good in the lower priced market and sells it at the same time in the highed priced market. The existance of trade costs would ___ opportunites of abitrage
a) lower b) not affect c) increase d) completly eliminate