Carlos and Darla are playing the dictator game. Carlos is assigned the role of dictator and given $20 to split between the two of them. Based on previous experiments with this game, if Carlos is a typical player, behavioral economists would expect:
A. Carlos to keep all of the money for himself.
B. Carlos to give all of the money to Darla.
C. Carlos to split the money evenly with Darla.
D. Carlos to split the money, keeping a little more than half for himself.
Answer: D
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Refer to Figure 13.3. If exchange rates are floating, an expansionary fiscal policy and the typical Fed response to the change in inflation caused by the fiscal policy would best be represented by a movement from ________ in panel (a) and a
corresponding movement from ________ in panel (b). A) point A to point D; point X to point Y B) point C to point B; point X to point Y C) point D to point A; point Y to point X D) point B to point C; point Y to point X
Which is NOT an example of moral hazard
a. people eat less at all-you-can-eat buffets b. loggers clear-cut a tract of land rather than when paying per tree felled c. Drivers of heavier, safer cares are more likely to run stop signs d. workers on commission work harder than those paid an hourly wage
If a developing country has sufficient reserves, the buying and selling of foreign currency by the central bank is:
A. likely to have a much smaller impact on the exchange rate than in developed countries. B. completely ineffective on the exchange rate. C. likely to have a much greater impact on the exchange rate than in developed countries. D. likely to have roughly the same impact on the exchange rate as in developed countries.
Well-defined property rights give entrepreneurs the incentive to
A. evade taxes. B. lobby Congress in order to increase environmental regulations. C. engage in risky business endeavors in order to accumulate future wealth. D. use the eminent domain laws to seize property for public use.