Suppose Jim and Celia,a Married Couple,are Trying to Decide What

question 138

Multiple Choice

Suppose Jim and Celia,a married couple,are trying to decide what to do on a Friday.Jim would prefer to see Rambo X while Celia would prefer to see Das Auto,an arty foreign film.Both films are showing at the local Megaplex.The joy they receive from the films and seeing them together,or separately,is shown in the payoff matrix.Both Jim and Celia know the information contained in the payoff matrix.They purchase their tickets simultaneously,ignorant of the other's choice.
-Refer to the payoff matrix above.By letting either Jim or Celia buy a ticket first,the game is now

• A) a prisoner's dilemma.
• B) no longer a prisoner's dilemma.
• C) unfair.
• D) without an equilibrium.
• E) an ultimatum bargaining game.

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Definitions:

Net Realizable Value

The estimated selling price of goods, minus the estimated costs of completion and the costs necessary to make the sale, often used in inventory valuation and accounts receivable.

Notes Receivable

Financial claims against debtors documented through promissory notes that promise to pay the amount due with interest.

Bad Debt Expense

An expense account reflecting the cost of accounts receivable that a company does not expect to collect.

Promissory Note

A written, legally binding promise to pay a specified sum of money on a certain date or upon demand.