Economists have used the ultimatum game and the dictator game in experiments designed to determine
A) whether consumers care about fairness when they make decisions.
B) whether consumers believe it is fair for producers to raise the price of a product for which there is excess demand.
C) whether consumers understand the difference between implicit costs and explicit costs.
D) whether consumers understand the rule of equal marginal utility per dollar spent.
Answer: A
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A gold purchase by the U.S. Treasury
A) reduces bank reserves. B) increases bank reserves. C) increases Federal Reserve equity. D) leaves bank reserves unaffected.
An experienced software engineer starts a new job with a pay package that is 14 percent higher than her previous salary. The expected inflation in the economy is 10 percent. However, the actual inflation in the following year turns out to be 14 percent. Which of the following costs of inflation did she have to bear?
a. Menu costs b. Shoe-leather costs c. Unit-of-account costs d. Time costs
Taxing people according to their marginal valuations of a public good may be efficient, but it may not be fair if incomes differ
Indicate whether the statement is true or false
Which of the following nations is not a member of the European Union?
A. Switzerland. B. France. C. Germany. D. Italy.