The Self-Interest Model Predicts That the Outcome of the "Ultimatum

question 33

Multiple Choice

The self-interest model predicts that the outcome of the "ultimatum bargaining game" in which the allocator starts with $20 is that

• A)the allocator will offer the receiver $10 and keep $10 for himself.
• B)the allocator will offer the receiver $0.01 and will propose to keep $19.99 for himself.
• C)the receiver will always reject the allocator's proposal.
• D)the allocator will always keep the full $20.

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Definitions:

U.S. Imports

Goods and services purchased by residents of the United States that are produced in and brought from other countries.

Long-Run Effect

The ultimate impact of economic policies or market changes, characterized by all inputs and outputs being variable and firms fully adjusting to new conditions.

Tariff on Imports

A levy placed on imported goods and services by a government to shield local industries from overseas competition.

Total Output

The complete quantity of goods or services produced by a company, sector, or economy within a specific timeframe.