each child fetch b. Jill and Jack's parents are worried that the two chil- dren don't cooperate enough with one another. Sup pose they make Jill and Jack share equally their revenues from selling the water. Given that both are self-interested, construct the payoff matrix for the decisions Jill and Jack face regarding the number of pails of water each should carry. What is the equi- librium outcome? 8. The owner of a thriving business wants to open a new office in a distant city. If he can hire someone who will manage the new office honestly, he can afford to nay that person a weekly salary of $2,000 ($1,000 more than the manager would be able to earn elsewhere) and still earn an economic profit of $800. The owner's con- cern is that he will not be able to monitor the manager's behavior and that the manager would therefore be in a position to embezzle money from the business. The Owner knows that if the remote office is managed dis- knowing the other other to a. Does b. How see w equili highe honestly, the manager can earn $3,100, which results in an economic loss of $600 per week. (LO3) a. If the owner believes that all managers are narrowly self-interested income maximizers, will he open the C. Is thi d. Supp Playe A ch new office? or sh D. Suppose the owner knows that a managerial candidate Is a devoutly religious person who condemns dishonest behavior and who would be willing to pay up to $15,000 to avoid the guilt she would feel if she were dshonest. Will the owner open the remote office? e. Supp that outc 10. Imagine 9. Consider the following "dating game," which has two players, A and B, and two strategies, to buy a movie ticket or a baseball ticket. The payoffs, given in points, are as shown in the matrix below. Note that the highest payoffs occur when both A and B attend the same event. lot that so that at the s takes y spot be ing to t0 avo
each child fetch b. Jill and Jack's parents are worried that the two chil- dren don't cooperate enough with one another. Sup pose they make Jill and Jack share equally their revenues from selling the water. Given that both are self-interested, construct the payoff matrix for the decisions Jill and Jack face regarding the number of pails of water each should carry. What is the equi- librium outcome? 8. The owner of a thriving business wants to open a new office in a distant city. If he can hire someone who will manage the new office honestly, he can afford to nay that person a weekly salary of $2,000 ($1,000 more than the manager would be able to earn elsewhere) and still earn an economic profit of $800. The owner's con- cern is that he will not be able to monitor the manager's behavior and that the manager would therefore be in a position to embezzle money from the business. The Owner knows that if the remote office is managed dis- knowing the other other to a. Does b. How see w equili highe honestly, the manager can earn $3,100, which results in an economic loss of $600 per week. (LO3) a. If the owner believes that all managers are narrowly self-interested income maximizers, will he open the C. Is thi d. Supp Playe A ch new office? or sh D. Suppose the owner knows that a managerial candidate Is a devoutly religious person who condemns dishonest behavior and who would be willing to pay up to $15,000 to avoid the guilt she would feel if she were dshonest. Will the owner open the remote office? e. Supp that outc 10. Imagine 9. Consider the following "dating game," which has two players, A and B, and two strategies, to buy a movie ticket or a baseball ticket. The payoffs, given in points, are as shown in the matrix below. Note that the highest payoffs occur when both A and B attend the same event. lot that so that at the s takes y spot be ing to t0 avo
Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter22: Frontiers Of Microeconomics
Section: Chapter Questions
Problem 6PA
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