Use the Following to Answer Questions

question 13

Multiple Choice

Use the following to answer questions
Scenario I
The following 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 of 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 the ultimatum game,the decision to reject an offer has been interpreted differently.One explanation is that Deciders seek,on principle alone,to exact retribution on Dividers who offer unfair deals.Another explanation is that rejecting unfair offers is part of a strategy to help ensure more fair deals in the future.Which strategy is the BEST way to evaluate these two explanations?

• A)Determine if Deciders are more or less likely to reject an unfair deal in which the Dividers change from trial to trial.
• B)Determine if Deciders are more or less likely to reject an unfair deal in multiple-trial games when they are always the Decider versus games in which they alternate between being the Divider and the Decider.
• C)Determine if Deciders would be equally likely to reject an unfair deal in the traditional game relative to scenario in which they were told that the Divider usually makes fair deals.
• D)Determine if Deciders in multiple-trial games are more or less likely to reject an unfair deal if the deal on the previous trial also was rejected.

---

Definitions:

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales, such as rent, salaries, and loan payments.

Fixed Operating Expense

Financial obligations that stay the same irrespective of production or sales figures, encompassing rental charges, payroll, and insurance premiums.

High-Low Method

An accounting technique used to estimate the fixed and variable components of a cost based on the highest and lowest activity levels.

Least-Squares Regression

A statistical method used to determine the line of best fit by minimizing the sum of the squares of the vertical distances of the points from the line.