Suppose That an Economics Professor Selects Two Students,Byron and Regina,to

question 315

Multiple Choice

Suppose that an economics professor selects two students,Byron and Regina,to participate in a classroom experiment.The professor gives Byron ten $1 bills.Byron must pick an allocation of the ten $1 bills to offer to Regina.If Regina accepts the allocation,each student keeps his or her portion of the money.If Regina rejects the allocation,the professor keeps the $10,and each student receives nothing.Byron selects $9 for himself and $1 for Regina.Based on the studies of human decision making,which of the following statements is correct?

• A) If Regina accepts the offer, she is behaving rationally.
• B) If Regina rejects the offer, she may value fairness more than $1.
• C) If Regina rejects the offer, Byron made a bad choice by trying to keep $9 for himself.
• D) Any of the above could be correct.

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Definitions:

Economic Strike

A work stoppage conducted by employees to demand higher wages, better benefits, or improved working conditions from their employer.

Recognition Strike

A type of strike aiming to compel an employer to recognize and negotiate with the union as the official collective bargaining agent for the workers.

Sympathy Strike

A work stoppage by workers in one industry intended to show support for striking workers in a different industry or company.

NLRA

A key piece of legislation in US labor law, the National Labor Relations Act establishes the rights of workers to unionize and negotiate collectively with their employers.