Use the Following Statements to Answer the Question: I

question 71

Multiple Choice

Use the following statements to answer the question: I. Consider the problem of negotiating the price of a rug that costs $100 to make. If there are two buyers (one with a maximum willingness-to-pay of $200 and one with a maximum willingness-to-pay of $250) , then the situation is no longer a constant sum game.
II) The likely outcome from the game described in statement I is that the second buyer will bid a price slightly above $200 to win the rug.

• A) I and II are true.
• B) I is true and II is false.
• C) II is true and I is false.
• D) I and II are false.

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Definitions:

ITQs

Individual Transferable Quotas; a system used in fisheries management in which individual fishers are allocated specific shares of the total allowable catch.

Living Standards

A measure of the wealth, comfort, material goods, and necessities available to individuals or societies.

Per Capita Energy

The average amount of energy consumption per person in a specific population or area.

Economically Efficient

A situation in which every resource is optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.