If the demand for a product is elastic, then a rise in price will
a. cause total spending on the good to increase.
b. cause total spending on the good to decrease.
c. keep total spending the same, but reduce the quantity demanded.
d. keep total spending the same, but increase the quantity demanded.
b
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When two people are on the contract curve, the allocation of goods
A) cannot be improved. B) is pareto efficient. C) is such that neither individual can be made better off without making the other worse off. D) All of the above.
Consider a version of the ultimatum game in which player A makes an integer offer {1,2 …,9} to player B. If B accepts, he or she gets that amount of money and A gets to keep the remainder of $10 . If B rejects, both get nothing. Which of the following is an offer that arises in a subgame-perfect equilibrium assuming players only care about monetary payoffs?
a. 1. b. 2. c. 4. d. 5.