This topic contains a solution. Click here to go to the answer

Author Question: Sarah and Claire are sisters. Their aunt gave 10 cookies to Sarah and asked her to share some with ... (Read 116 times)

abarnes

  • Hero Member
  • *****
  • Posts: 556
Sarah and Claire are sisters. Their aunt gave 10 cookies to Sarah and asked her to share some with Claire. She could choose how many she would give her, but if Claire was not happy with her share, her aunt would take back all the cookies.
 
  a) How should Sarah decide how many cookies to give Claire if Claire prefers more cookies to fewer cookies? b) Will there be any change in her decision if she knows that Claire values fairness?

Question 2

Which of the following statements explains why monopolies weaken the functioning of the invisible hand?
 
  A) A monopoly is a price taker.
  B) The quantity produced by a monopoly is too low.
  C) Monopolies face an upward sloping demand curve.
  D) A monopoly sets the price of its good below marginal costs.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

nickk12214

  • Sr. Member
  • ****
  • Posts: 332
Answer to Question 1

a) Sarah should decide how many cookies to give Claire using the technique of backward induction. Because Claire prefers more cookies to fewer cookies, she will always accept Sarah's offer. Given that Claire will always accept her offer, Sarah should offer the lowest possible number of cookies to Claire.
b) If Sarah knows that Claire values fairness, she will realize that Claire will not accept an unfair share of cookies. Because neither of them will get any cookies if Claire rejects the offer, Sarah will offer an equal share to Claire.

Answer to Question 2

B




abarnes

  • Member
  • Posts: 556
Reply 2 on: Jun 29, 2018
:D TYSM


atrochim

  • Member
  • Posts: 331
Reply 3 on: Yesterday
Great answer, keep it coming :)

 

Did you know?

Dogs have been used in studies to detect various cancers in human subjects. They have been trained to sniff breath samples from humans that were collected by having them breathe into special tubes. These people included 55 lung cancer patients, 31 breast cancer patients, and 83 cancer-free patients. The dogs detected 54 of the 55 lung cancer patients as having cancer, detected 28 of the 31 breast cancer patients, and gave only three false-positive results (detecting cancer in people who didn't have it).

Did you know?

Certain chemicals, after ingestion, can be converted by the body into cyanide. Most of these chemicals have been removed from the market, but some old nail polish remover, solvents, and plastics manufacturing solutions can contain these substances.

Did you know?

Amphetamine poisoning can cause intravascular coagulation, circulatory collapse, rhabdomyolysis, ischemic colitis, acute psychosis, hyperthermia, respiratory distress syndrome, and pericarditis.

Did you know?

Methicillin-resistant Staphylococcus aureus or MRSA was discovered in 1961 in the United Kingdom. It if often referred to as a superbug. MRSA infections cause more deaths in the United States every year than AIDS.

Methicilli ...
Did you know?

Though the United States has largely rejected the metric system, it is used for currency, as in 100 pennies = 1 dollar. Previously, the British currency system was used, with measurements such as 12 pence to the shilling, and 20 shillings to the pound.

For a complete list of videos, visit our video library