When the ultimatum game is played for larger rather than smaller amounts of money, behavioral economists have found that when the proposed splits are very uneven:
A. responders are much more likely to accept the offer because of the amount of money
involved.
B. responders are no more likely to accept the offer if they consider the split to be unfair.
C. responders are much less likely to accept the offer because their sense of unfairness is
heightened with larger amounts of money.
D. responders will accept offers at a higher rate but will exact greater emotional penalties on
the proposer.
Answer: B
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Suppose in a democratic society, all voters prefer choice G over choice B; however, when the two choices are presented along with a third choice, R, B wins the election. This violates the assumption of
A) transitivity. B) non-dictatorship. C) independence of irrelevant alternatives. D) completeness.
According to the Keynesian theory, inflation
a. can occur at any level of employment. b. can occur only with government spending. c. can occur when aggregate expenditure exceeds output at full employment. d. will occur when planned investment is below planned saving at full employment.
A.P. Lerner believes that society maximizes its total utility when income distribution is
a. perfectly equal, assuming individual utility functions are different b. perfectly equal, assuming individual utility functions are the same c. perfectly unequal, assuming individual utility functions are the same d. perfectly unequal, assuming individual utility functions are different e. whatever the market dictates because individual utility functions are different
The benefits of specialization can be used to explain why:
A. machines are more productive than human workers. B. individuals and nations benefit from trade. C. big companies take advantage of smaller ones. D. workers prefer to work on a variety of tasks during the day.