Assuming the standard assumptions, in a repeated-play ultimatum game, the first player's best strategy in the last round is to:
A. split the money evenly with a bit more going to him or herself.
B. take all the money for oneself.
C. give the most money to the opponent.
D. give the most money to oneself.
Answer: D
You might also like to view...
A tradable allowance is:
A. the minimum amount set by the government that can be bought or sold in a market. B. a production or consumption quota that can be bought or sold. C. the permitted price for the trade of a particular good. D. None of these statements is true.
The price at which the quantity supplied equals the quantity demanded is the
A. equilibrium quantity. B. market price. C. satiation point. D. equilibrium price.
The production possibilities frontier model assumes which of the following?
A) Labor, capital, land, and natural resources are unlimited in quantity. B) The economy produces only two products. C) Production of any level of the two products that the economy produces is currently possible. D) The level of technology is variable.
Ali inherits $10,000 from his great-great aunt in 2008. His great-great aunt's will requires that Ali spend the money before December 31, 2009. He has two spending options: He can either spend the amount in 2008 or in 2009. Suppose this is Ali's only source of income and the interest rate on loans or savings is 10 percent.(a) How much could Ali spend in 2008 if he only consumes in 2008? How much could Ali spend in 2009 if he only consumes in 2009?(b) What is the opportunity cost of consuming $1.00 in 2008 in terms of forgone consumption in 2009? Draw Ali's budget constraint and optimal consumption bundle, considering that the spending in 2008 is measured along the horizontal axis.(c) Ali decides to spend $6,000 in 2008 and $4,400 in 2009. Show this optimal consumption bundle using a
budget constraint and indifference curve diagram. What will be an ideal response?