This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single grade. They both will enjoy a higher grade when more effort is put into the project, but they also get pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.According to the figure shown, if Sarah puts forth low effort, then Joe should:
A. put forth high effort.
B. give an ultimatum.
C. put forth low effort.
D. leave the market.
Answer: C
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Indicate whether the statement is true or false
If the reserve ratio is 12.5 percent, then $2,000 of additional reserves can create up to
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Suppose two countries have identical growth rates of real GDP and the same initial value of per capita real GDP. We know, then, that
A. economic well being is the same in both countries. B. living standards may differ in the two countries because we don't know how income is distributed in the countries. C. living standards in the two countries are probably identical, or very close to each other. D. life expectancies are the same in both countries.