The ultimatum bargaining game is a game in which:
A. the second player doesn't know the strategy choice of the first player.
B. both players give each other an ultimatum.
C. the first player confronts the second player with a take-it-or-leave-it offer.
D. both players have a dominant strategy to cheat the other player.
Answer: C
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Refer to Horizontal Merger. If area F + G is larger than area E, we can conclude that the horizontal merger
The following questions refer to the accompanying diagram, which shows the effects of a horizontal merger. Before the merger, the firm behaves competitively producing Q0 and charging P0. The merger lowers the firm's marginal cost and gives the firm enough market power to switch to the monopoly equilibrium.
a. will reduce economic efficiency.
b. causes both consumers' and producer's surplus to rise.
c. will not increase the firm's profit and thus will not be undertaken.
d. creates an increase in social gain.
Daryn is raking leaves to earn money for his university's economics club. In the first hour, he rakes 8 bags of leaves. In the second hour, he rakes 6 bags of leaves. If he earns $8 per hour, the value of the marginal product of the second hour of labor is $16
a. True b. False Indicate whether the statement is true or false
Perfect, or 100%, recycling is
a. Physically feasible but always too expensive b. Not possible according to the second law of thermodynamics c. Physically feasible but not done because of failure to incorporate environmental costs d. Only accomplished for a few non-renewable resources e. Not currently feasible but will be possible in the future
Refer to the diagram where D and S are the United States' demand for and supply of Swiss francs. At the equilibrium exchange rate, E, the United States' balance of payments is in equilibrium. A shift of the demand curve to D' might be the result of:
A. a relative decline in interest rates in Switzerland.
B. a reduction in the United States' relative price level.
C. a recession in the United States that slows its rate of growth.
D. a relative decline in interest rates in the United States.