Use the Following to Answer Questions

question 170

Multiple Choice

Use the following to answer questions :
Scenario I
The scenario describes research findings discussed in the following review article:
Cameron,C.C. ,& Thaler,R.H.(1995) .Anomalies: Ultimatums,dictators,and manners.Journal of Economic Perspectives,9(19) ,209-219.
In the ultimatum game,two participants are assigned to be either the "Divider" or the "Decider" by a coin flip.The Divider is given a sum of money,such as $10,and is instructed to offer some nonzero portion of it to the Decider.If the Decider accepts,she gets to keep what was offered and the Divider keeps the rest.If the Decider rejects the deal,both players get nothing.Both players are made aware of all these rules and then the game begins.Under these conditions,Dividers usually offer a little less than $5 and Deciders usually accept this amount.If Dividers offer less,Deciders often reject and both players get nothing.A similar game is termed the dictator game.Players are randomly assigned to be either the "Allocator" or the "Receiver." The Allocator is given a sum of money and makes a decision about how much money she would like to give the Receiver,who must accept this result.Allocators in this game usually offer some money to the Receiver but typically less than they offer the Dividers in the ultimatum game.
-(Scenario I) In a single $10 ultimatum game,if both players behaved independently without cooperating or retaliating and sought to maximize their individual earnings:

• A)Dividers would offer exactly $5 and Deciders would accept.
• B)Dividers would offer a little less than $5 and Deciders would accept.
• C)Dividers would offer a penny and Deciders would accept.
• D)Dividers would offer a penny and Deciders would reject the offer.

---

Definitions:

Inventories

The complete list of items such as products, goods in production, or materials that a company holds, intended for sale or use in the production process.

Current Liabilities

Short-term financial obligations that are due within one fiscal year or the operating cycle of a business, whichever is longer.

Cash at Bank

The amount of liquid assets or cash that a company or individual has deposited in a banking institution.

Net Income

The total earnings of an organization after subtracting all expenses, taxes, and costs from its total revenue.