Game theory tells us that in the ultimatum game:
A. the threat to reject is credible and is expected to increase the amount given.
B. the threat to reject in not credible, and is not expected to increase the amount given.
C. the threat to reject is credible, but is not expected to increase the amount given.
D. the threat to reject in not credible, but still is expected to increase the amount given.
B. the threat to reject in not credible, and is not expected to increase the amount given.
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The default risk premium fluctuates mainly
A) because bond rating agencies tend to be inconsistent in their ratings of bonds. B) because risk-neutral investors will often become risk-averse as time passes. C) because taxes tend to rise over the long run. D) as new information about a borrower's creditworthiness becomes available.
Externalities are failures of
A. the market to correctly price resources. B. firms and consumers to make rational tradeoffs. C. firms to make rational tradeoffs. D. consumers to make rational tradeoffs.
There is only one gas station within hundreds of miles. The owner finds that when she charges $3 a gallon, she sells 199 gallons a day, and when she charges $2.99 a gallon, she sells 200 gallons a day. The marginal revenue of the 200th gallon of gas is:
a. $.01. b. $1. c. $2.99. d. $3. e. $600.
Billionaires get most or all of their income from
A. wages and salaries. B. property. C. government transfer payments.