Loose Leaf Microeconomics with Connect Access Card
20th Edition
ISBN: 9781259287084
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 8, Problem 12DQ
To determine
Ethics of unconscious nudges.
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Theo and Addy are deciding what toys to pick out at the toy store. Depending on what toys they pick, they can play different games together, but they can’t coordinate their choices. They can’t talk to one another at all until after that make their choice.
Below is their payout matrix which shows their utility for each choice. All the bold figures are for Theo and all the non bold figures are for Addy.
Addy Strategies
Theo
Strategies
Toy Gas Pump
Jump Rope
Toy food
20
10
10
3
Ball
7
3
9
4
a) If Theo chooses Toy Food, what would be the possible outcomes for Addy? What would be best for Addy?
b) If Addy chose a Toy Gas Pump, what are the possible outcomes for Theo? What would be best for Theo?
c) Does Addy have a dominant strategy? If yes, what is her strategy? If not how can you tell?
d) Does Theo have a dominant strategy? If yes, what is her strategy? If not how…
1. In the Traveler’s Dilemma, each of two people chooses a number between 180and 300. Each is paid the lower of the two numbers, but the person who choosesthe higher number must pay an amount x to the person who chose the lowernumber. In one case, x = 5, while in the other case x = 180. What differencewould you expect between choices with the two values of x?a. Higher choices when x = 5.b. Higher choices when x = 180.c. Little or no difference.d. Impossible to predict.2. Consider these statements about communication in experiments.1. Chat communication is usually more effective than written simple signals (A,B, etc.).2. Friendly appeals to mutual interest and payoff dominance are effective.3. Promises often affect beliefs and actions.4. A promise is not worth the paper it is printed on.Which of these are true?a. 1 and 2b. 1 and 3c. 2 and 3d. 1, 2, and 33. A treasure is hidden under one of the four boxes below. A person gets twoguesses to find the treasure. What do you think is the most…
Answer the given question with a proper explanation and step-by-step solution.
Angela and Betty are deciding how many nights to stay at a resort. Given above are the budget lines and indifference curves for both Angela and Betty. They are not travelling together and therefore will make independent decisions (they do not have to stay the same number ofnights) L1 is the budget line for each of them before any discounts are offered.
Each of them is offered a “Buy Three Nights Get One Free” deal, where if they stay for three nights the fourth night is free. This is just a one-time discount and all subsequent nights after the fourth night are at the undiscounted price. The budget line after the discount is the heavily shaded blue line L2. You may assume that each consumer wishes to maximize their utility (satisfaction) when determining the number of nights they will stay.
(a) With the budget line at L1 how many nights will Angela stay?(b) With L1 the budget line how many nights will Betty…
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