In professional golf, a tournament winner might win, say, $1 million, whereas second place wins only $600,000. Why might golf have a 40% reduction in prize money from first and second place?
A) To ensure that there is enough money to pay those who finish near last.
B) To motivate golfers to take risks they might not otherwise take.
C) To motivate golfers to not take risks they might otherwise take.
D) The Professional Golfers Association is a cartel.
B
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If a few oil-producing countries in the Middle East decide to jointly limit the production of oil,
A) they are forming a cartel. B) they would like the price of oil to be the same as if the market were perfectly competitive. C) game theory does not apply to their actions because they are nations, not firms. D) they will try to operate as a large, monopolistically competitive firm. E) they will agree to lower the price of oil in order to increase their profits.
"Inflation Targeting Rule" is a special case of a
A) Taylor Rule with zero weight on output. B) Taylor Rule with zero weight on inflation. C) Taylor Rule with an equal weight on output and inflation. D) Taylor Rule with different but positive weights on output and inflation.