This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Sarah and Claire are sisters. Their aunt gave 10 cookies to Sarah and asked her to share some with ... (Read 125 times)

abarnes

  • Hero Member
  • *****
  • Posts: 556
on: Jun 29, 2018
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
Reply #1 on: Jun 29, 2018
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
YES! Correct, THANKS for helping me on my review

irishcancer18

  • Member
  • Posts: 310
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

« previous next »
 

Did you know?

Adolescents often feel clumsy during puberty because during this time of development, their hands and feet grow faster than their arms and legs do. The body is therefore out of proportion. One out of five adolescents actually experiences growing pains during this period.

Did you know?

When blood is exposed to air, it clots. Heparin allows the blood to come in direct contact with air without clotting.

Did you know?

Serum cholesterol testing in adults is recommended every 1 to 5 years. People with diabetes and a family history of high cholesterol should be tested even more frequently.

Did you know?

Excessive alcohol use costs the country approximately $235 billion every year.

Did you know?

Earwax has antimicrobial properties that reduce the viability of bacteria and fungus in the human ear.

Possible symbiotic or endosymbiotic relationships that gave rise to the first eukaryotic cells Possible symbiotic or endosymbiotic relationships that gave rise to the first eukaryotic cells
Booker T. Washington in his office at Tuskegee Institute, 1900. Washington chose a policy of accommo Booker T. Washington in his office at Tuskegee Institute, 1900. Washington chose a policy of accommo
Jeremy Deller, A Good Day for Cyclists (painted by Sarah Tynan). Jeremy Deller, A Good Day for Cyclists (painted by Sarah Tynan).
question asked question asked
Capital’s Share of Income in a Cross-Section of Countries Capital’s Share of Income in a Cross-Section of Countries
A phylogenetic tree showing that all non-African human populations share a closer genetic relationsh A phylogenetic tree showing that all non-African human populations share a closer genetic relationsh
Video: Endocytosis -Types and Phagocytosis

For a complete list of videos, visit our video library