Emotions like guilt and sympathy:
A. reduce the likelihood that a transaction will maximize total economic surplus.
B. can solve commitment problems, but generally reduce players' payoffs.
C. can solve commitment problems.
D. are irrelevant to economic decision-making.
Answer: C
You might also like to view...
If a firm finds that, at its current level of employment, VMP > W, it will
A) be maximizing profits. B) be minimizing profits. C) increase the amount of labor it hires. D) decrease the amount of labor it hires.
Under the Exchange Rate Mechanism of the European Monetary System, when the German mark depreciated below its lower limit against the British pound, the German central bank was required to buy ________ and sell ________,
thereby ________ international reserves. A) pounds; marks; losing B) pounds; marks; gaining C) marks; pounds; gaining D) marks; pounds; losing
If 50 units of resources can produce either 1 ton of sugar beets or 100 lb. of ham in Germany, while 90 units of resources can produce either 2 tons of sugar beets or 300 lb. of ham in Poland,
a. Poland has a comparative advantage in producing both goods b. Germany has a comparative advantage in producing sugar beets c. neither country has an absolute advantage in producing sugar beets, but Poland has an absolute advantage in producing ham d. Germany can produce more ham than Poland can e. mutually beneficial international trade is not possible
Because money __________________, people are _________________ likely to specialize in their work in a money economy
A) is a store of value; less B) eliminates the double coincidence of wants; more C) is a unit of account; more D) eliminates the need for holdings of precious metals; more