Consider the Following Scenario to Answer the Questions That Follow

question 66

Multiple Choice

Consider the following scenario to answer the questions that follow.
Sarah and Laura are playing an ultimatum game where Laura is given an eight-slice pizza and asked to propose a way of splitting it with Sarah. When Sarah learns Laura's proposal, Sarah chooses whether to accept or reject the split. If Sarah accepts the split, both players receive the slices of pizza according to Laura's split proposal. If Sarah rejects the split, both players receive nothing. This game will be played only once, so Laura does not have to worry about reciprocity when making her choice. Assume that both players enjoy pizza and each would strictly prefer to eat more pizza than less.
-Which of the following is the fairest split proposal Laura can offer?

• A) Laura receives three slices and Sarah receives five slices.
• B) Laura receives one slice and Sarah receives seven slices.
• C) Laura receives two slices and Sarah receives five slices.
• D) Laura receives seven slices and Sarah receives one slice.
• E) Laura receives four slices and Sarah receives four slices.

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Definitions:

Importation

The process of bringing goods or services into a country from abroad for the purpose of selling.

Indirect Quote

Exchange rate expression showing the amount of foreign currency required to buy or sell one unit of the home currency.

British Pounds

The official currency of the United Kingdom, symbolized as GBP (£), representing the monetary value in pounds sterling.

Expropriation

The act of a government taking private property for public use, usually with compensation.