A characteristic function is:
a. one that identifies negotiations which depend on the characteristics of the bargainers.
b. one that gives the value each possible coalition of a group's members can create by operating independently.
c. one that identifies the most beneficial price for the buyer involved in a transaction.
d. one that identifies the most beneficial price for the seller involved in a transaction.
B
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Joss is a marketing consultant. Iris and Daphne are potential customers interested in commissioning Joss to undertake a market survey and compile the findings in a report
Iris is willing to pay $500 for the service while Daphne is willing to pay $800. Suppose that the opportunity cost of Joss's time is $1,200. Assume that Iris and Daphne do not know each other. If the price of the report is $800 per copy A) only Daphne will purchase Joss's services and Joss will undertake the job for her. B) both Iris and Daphne will purchase Joss's services and Joss will undertake the job. C) only Daphne will want to purchase Joss's services but Joss will not be willing to do the work. D) neither Iris nor Daphne will commission the work.
What is the term for the contract that maximizes the principal's payoff subject to the constraint that the principal lacks the agent's private information?
a. First best b. Second best c. Third best d. Pareto optimum
Which of the following makes it possible for even a small investor to hold a diverse set of stocks and still keep the cost of purchasing additional stock holdings low?
What will be an ideal response?
"Backflows" occur when:
A. two countries send immigrants to each other in approximately equal numbers. B. physical capital flows into a country that has lost labor due to migration. C. immigrants send financial payments back to family in their country of origin. D. migrants return to their home country.