Differentiate between norms and focal points
The mutually understood customs the parties to a negotiation follow from experience are known as norms. A focal point is a clear standard that people use to coordinate their activities. Norms and focal points can both lower the costs of negotiation and leave fewer benefits to go unrealized by the bargainers.
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If demand is perfectly inelastic, the absolute value of the price elasticity of demand is
A) more than one. B) less than one. C) zero. D) equal to the absolute value of the slope of the demand curve.
Workers covered by defined contribution pension plans retire at later ages than workers covered by defined benefit plans
Indicate whether the statement is true or false
Adverse selection refers to when:
A. one party to a transaction has more information than the other and this results in a bargaining dispute. B. one party selects the wrong strategy and they are displeased with their selection. C. one party to a transaction has more information than the other and transactions occur less frequently due to the information asymmetry. D. neither party is willing to be party to a transaction because they don’t have enough information.
While the U. S. government investigates few claims of dumping, nearly all of the claims are upheld by the International Trade Commission.
Answer the following statement true (T) or false (F)