Emotions like guilt and sympathy:
A. reduce the likelihood that a transaction will maximize total economic surplus.
B. can solve commitment problems, but generally reduce players' payoffs.
C. are irrelevant to economic decision-making.
D. can solve commitment problems.
Answer: D
You might also like to view...
Stock and Watson found that ________ was responsible for about 20—30 % of the reduction in output volatility that occurred in the mid-1980s
A) reduced shocks to productivity B) reduced shocks to food and commodity prices C) better monetary policy D) better inventory control
Suppose that the exchange rate between British pounds and U.S. dollars is originally $2.50 per pound. If it then changes to $3 for 1 pound, the price of U.S. goods to British importers will: a. rise
b. fall. c. stay the same. d. change in an indeterminate direction.
An emissions fee is preferable to a cap-and-trade when MSB are elastic and costs are uncertain.
A. True B. False C. Uncertain
Which of the following products comes closest to having a perfectly inelastic demand?
A) gasoline B) cholesterol medication in general C) iPhones D) bus rides