Assuming the standard assumptions, in a single-play ultimatum game, the second player's best strategy in the last round is to:
A. accept only those offers over 50 percent of the total.
B. accept any offer greater than zero.
C. reject all but evenly split offers.
D. reject all offers.
Answer: B
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Price floors are illegal in the United States
Indicate whether the statement is true or false
According to the quantity theory of money, if the economy were facing inflation, the Federal Reserve Bank could combat it by:
A. decreasing the supply of money. B. increasing the supply of money. C. cutting taxes. D. increasing taxes.
When demand is perfectly inelastic, the demand curve will be
a. negatively sloped, because buyers decrease their purchases when the price rises. b. vertical, because buyers purchase the same amount as before whenever the price rises or falls. c. positively sloped, because buyers increase their purchases when price rises. d. positively sloped, because buyers increase their total expenditures when price rises.
The primary purpose of NAFTA is to
A. Ensure that there are no losers as the result of trade agreements between Mexico, Canada, and the United States. B. Encourage the development of the Mexican and Canadian economies at the expense of U.S. workers and consumers. C. Increase income in Mexico, Canada, and the United States by encouraging free trade. D. Protect U.S. and Canadian workers from unfair competition from Mexico.