Author Question: Professor Parallax chooses two students in his economics class, Jasmine and Cassandra, to ... (Read 107 times)

littleanan

  • Hero Member
  • *****
  • Posts: 575
Professor Parallax chooses two students in his economics class, Jasmine and Cassandra, to participate in the ultimatum game. He chooses Jasmine to be the allocator and Cassandra to be the recipient.
 
  He gives Jasmine 50 and as the allocator, she gets to decide how to split the money with Cassandra. If Cassandra decides to accept the amount allocated to her by Jasmine, both students get to keep the money. If Cassandra decides to reject her allocation, neither student gets to keep the money. How much will each student end up with if each student acts as if fairness is important? How much will each student end up with if only Cassandra acts as if fairness is important? How much will each student end up with if neither student cares about fairness?

Question 2

An increase in the wage rate causes
 
  A) a rightward shift of the firm's labor demand curve.
  B) a decrease in the quantity of labor demanded.
  C) an increase in labor's marginal productivity.
  D) a leftward shift of the firm's labor demand curve.


Dominic

  • Sr. Member
  • ****
  • Posts: 328
Answer to Question 1

If both students care about fairness, each will end up with 25. If only Cassandra, the recipient, cares about fairness, each student will end up with nothing since she would reject any split of the money other than 25 and 25. If neither student cares about fairness, Jasmine will give up as little as possible without leaving Cassandra with nothing. The split in this case will be 49.99 to Jasmine and 0.01 to Cassandra.

Answer to Question 2

B



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

According to the CDC, approximately 31.7% of the U.S. population has high low-density lipoprotein (LDL) or "bad cholesterol" levels.

Did you know?

In 2010, opiate painkllers, such as morphine, OxyContin®, and Vicodin®, were tied to almost 60% of drug overdose deaths.

Did you know?

Over time, chronic hepatitis B virus and hepatitis C virus infections can progress to advanced liver disease, liver failure, and hepatocellular carcinoma. Unlike other forms, more than 80% of hepatitis C infections become chronic and lead to liver disease. When combined with hepatitis B, hepatitis C now accounts for 75% percent of all cases of liver disease around the world. Liver failure caused by hepatitis C is now leading cause of liver transplants in the United States.

Did you know?

Malaria was not eliminated in the United States until 1951. The term eliminated means that no new cases arise in a country for 3 years.

Did you know?

Complications of influenza include: bacterial pneumonia, ear and sinus infections, dehydration, and worsening of chronic conditions such as asthma, congestive heart failure, or diabetes.

For a complete list of videos, visit our video library