This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single grade. They both will enjoy a higher grade when more effort is put into the project, but they also get pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.According to the figure shown, if Sarah puts forth low effort, then Joe should:
A. put forth high effort.
B. give an ultimatum.
C. put forth low effort.
D. leave the market.
Answer: C
Economics
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