Consider the same ultimatum game as in the previous questions but consider yet new preferences reflecting envy. In particular, now assume players get 1 util per dollar earned. That is all for the player who earns at least as much as the other. The player who earns strictly less than the other loses 1 util for each dollar difference. Which of the following is an offer that arises in a
subgame-perfect equilibrium with these preferences?
a. 1.
b. 2.
c. 4.
d. 5.
c
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When the price level increases, aggregate planned expenditure decreases, which leads to
A) a rightward shift of the aggregate demand curve. B) neither a movement along nor a shift of the aggregate demand curve. C) a downward movement along the aggregate demand curve. D) an upward movement along the aggregate demand curve. E) a leftward shift of the aggregate demand curve.
An externality can be a
A) cost or a benefit. B) benefit but not a cost. C) cost but not a benefit. D) marginal cost but not a total cost.
Russia, Iran and Qatar made the first serious moves in October 2008 toward forming an OPEC-style cartel for natural gas. Each of the countries can comply with the cartel agreement or to cheat on the cartel agreement
If all countries comply, the economic profit for each will be $140 million. If one country cheats, that country earns $200 million in economic profit and the other countries will have economic losses of $10 million. If all countries cheat, they break even. What are the strategies in this game? A) Comply with the cartel agreement or to cheat on the cartel agreement. B) Comply with the agreement and earn $140 million in profit. C) Cheat on the cartel agreement and earn -$10 million in profits. D) Earn between $140 and $200 million in profits.
When price is less than average variable cost at the profit-maximizing level of output, a firm should:
A) continue to produce the level of output at which marginal revenue equals marginal cost if it is operating in the short run. B) continue to produce the level of output at which marginal revenue equals marginal cost if it is operating in the long run. C) shutdown, because it will lose nothing in that case. D) shutdown, because it cannot even cover all of its variable costs let alone its fixed costs if it stays in business.