In a Dictator Game,player a Must Divide $100 Between Player

question 32

Multiple Choice

In a dictator game,player A must divide $100 between player A and player B.In this game,player B does not have the opportunity to reject an offer - they go home with whatever player A offers.Experiments have observed that when player A splits the $100,he or she consistently offers over $10 to player B.Which of the following comments fits best.

• A) Although player A is acting as economic theory usually assumes,he or she makes such offers because they seem more fair.
• B) Although player A is acting as economic theory usually assumes,he or she makes such offers although they are not fair.
• C) Although player A is not acting as economic theory usually assumes,he or she makes such offers because they seem more fair.
• D) Although player A is not acting as economic theory usually assumes,he or she makes such offers because they are not fair.

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Definitions:

Total Variable Cost

Total Variable Cost is the sum of all costs that vary with the level of output produced, such as materials and labor.

Total Fixed Cost

The total of all expenses that do not change with production volume or output in the short term, for example, lease payments or wages.

Output of Zero

A theoretical condition or benchmark where no goods or services are being produced or output is completely halted.

Average Total Cost

The cost per unit represented by dividing the entire production cost by the quantity of units produced.