Fine-dining restaurants commonly provide statements in their menus such as, "A 20% gratuity will be added to all checks for parties of six or more patrons"
Given that this statement tends to raise the level of tips or gratuities left by other groups of diners, the statement is a good example of: A) the endowment effect.
B) loss aversion.
C) anchoring.
D) none of the above
C
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Refer to Scenario 13.9. If this game is repeated over an infinite or uncertain horizon, the most likely observed behavior will be that
A) both firms pollute. B) only Lago pollutes. C) only Nessie pollutes. D) neither firm pollutes. E) the firms alternate polluting in different periods.
Suppose there are 11 buyers and 11 sellers, each willing to buy or sell one unit of a good, with values {$14, $13, $12, $11, $10, $9, $8, $7, $6, $5, $4,}. Assume no transaction costs and a competitive market. At the optimal bid-ask spread, how many transactions would the market maker undertake in this market
a. two transacttions b. three transactions c. four transactions d. five transactions