Question 1

What aspects of bargaining can affect market outcomes?

Accepted Answer

The outcomes of bargaining are generally indeterminate and hard to link to characteristics of the buyer or the seller.There are important elements of randomness, but some studies show that access to market-related information can affect outcomes.

Question 2

Utility possibility frontier shows:

Accepted Answer

A) the possible combinations of utility that an efficient bargain can get the negotiating parties. 
B) the exact bargain at which the negotiating parties eventually arrive. 
C) the highest utility each negotiating party can individually achieve. 
D) the possible combinations that maximize payoffs to the negotiating parties. 
A) the possible combinations of utility that an efficient bargain can get the negotiating parties. 
B) the exact bargain at which the negotiating parties eventually arrive. 
C) the highest utility each negotiating party can individually achieve. 
D) the possible combinations that maximize payoffs to the negotiating parties. A

Question 3

Identify the public good in the following.

Accepted Answer

A) A small library with a limited collection of books 
B) A crowded children's park in your neighborhood 
C) The visit to a museum which charges a nominal entry fee 
D) The scenic view of the ocean from a beach 
A) A small library with a limited collection of books 
B) A crowded children's park in your neighborhood 
C) The visit to a museum which charges a nominal entry fee 
D) The scenic view of the ocean from a beach D

Question 4

Which of the following statements is true about empty cores?

Accepted Answer

A) It is individually rational to form coalitions when cores are empty. 
B) There are no unblockable payoff allocations. 
C) The only way to prevent blocking is side payments among coalition members. 
D) Empty cores leave each person with payoff just equal to their production values. 
A) It is individually rational to form coalitions when cores are empty. 
B) There are no unblockable payoff allocations. 
C) The only way to prevent blocking is side payments among coalition members. 
D) Empty cores leave each person with payoff just equal to their production values.

Question 5

Assume that the characteristic functions of different coalitions in a three-person group are given by: V(1,2,3) = $60
V(1,2) = $40, V(2,3) = $30, and V(1,3) = $35.
The values created by the individuals separately are given by:
V(1) = $20, V(2) = $16, V(3) = $10.
Which of the following allocations will lie within the core?

Accepted Answer

A)     Payoffs to individuals 1,2, and 3 are $21, $17,and $22 respectively. 
B)     Payoffs to individuals 1,2, and 3 are $31, $17, and $12 respectively. 
C)     Payoffs to individuals 1,2, and 3 are $21, $26, and $13 respectively. 
D)     Payoffs to individuals 1,2, and 3 are $25, $18, and $17 respectively. 
A)     Payoffs to individuals 1,2, and 3 are $21, $17,and $22 respectively. 
B)     Payoffs to individuals 1,2, and 3 are $31, $17, and $12 respectively. 
C)     Payoffs to individuals 1,2, and 3 are $21, $26, and $13 respectively. 
D)     Payoffs to individuals 1,2, and 3 are $25, $18, and $17 respectively.

Question 6

Explain the significance of voting with suitable examples.

Accepted Answer

Most choices about private goods need no

Question 7

The mutually understood customs the two parties involved in a transaction follow from experience are known as _____.

Accepted Answer

A) focal points 
B) norms 
C) cores 
D) strategies 
A) focal points 
B) norms 
C) cores 
D) strategies

Question 8

On the boundary of the utility possibility frontier, if the utility of one person increases, that of the other will decline.

Accepted Answer

A) True 
 B)False

Question 9

A house is a private good because it is nonrival and nonexcludable.

Accepted Answer

A) True 
 B)False

Question 10

How can the theory of the core be used to explain the functioning of oligopolistic markets.

Accepted Answer

The theory of the core brings new insigh

Question 11

Alex's production is worth $60 and Harry's is worth $40.They decide to form a coalition and produce together such that their combined production is worth $135.What is the maximum benefit Alex can earn while ensuring Harry does not leave the coalition?

Accepted Answer

A) $75 
B) $96 
C) $77.5 
D) $94 
A) $75 
B) $96 
C) $77.5 
D) $94

Question 12

Elizabeth's opportunity cost of selling a widget is $18, while Jess values it at $27.Identify the correct statement from the following.

Accepted Answer

A) Jess can threaten to go to another seller if the transaction benefits Elizabeth more than her. 
B) The core is of the zone of agreement. 
C) The core consists of prices above $27, which benefits both parties. 
D) Elizabeth can threaten to go to another seller if the transaction benefits Jess more than her. 
A) Jess can threaten to go to another seller if the transaction benefits Elizabeth more than her. 
B) The core is of the zone of agreement. 
C) The core consists of prices above $27, which benefits both parties. 
D) Elizabeth can threaten to go to another seller if the transaction benefits Jess more than her.

Question 13

Which of the following statements is true about voting results if preferences are intransitive?

Accepted Answer

A) The result of voting never reflects majority preferences. 
B) It is impossible to predict the outcome when preferences are intransitive. 
C) The person who sets the agenda (sequence of votes) may be able to control the outcome. 
D) Only a Borda Count yields a unique result when preferences are intransitive. 
A) The result of voting never reflects majority preferences. 
B) It is impossible to predict the outcome when preferences are intransitive. 
C) The person who sets the agenda (sequence of votes) may be able to control the outcome. 
D) Only a Borda Count yields a unique result when preferences are intransitive.

Question 14

An advantage of settling disputes via arbitration rather than court cases is that:

Accepted Answer

A) the risk of an incorrect decision in the former case is negligible. 
B) the former is inexpensive and binding. 
C) the former is more likely to grant a lenient decision. 
D) the former may be more knowledgeable than an uninformed jury. 
A) the risk of an incorrect decision in the former case is negligible. 
B) the former is inexpensive and binding. 
C) the former is more likely to grant a lenient decision. 
D) the former may be more knowledgeable than an uninformed jury.

Question 15

Which of the following statements about voting is NOT true?

Accepted Answer

A) Voting theory posits that a majority vote by itself may indicate nothing at all about society's preferences. 
B) In those situations where voting does occur, it can have imperfections, just like markets might. 
C) There will be occasions when voters can advance their individual interests by misrepresenting their preferences or purchasing each other's votes. 
D) It is possible to devise a voting method in which the outcomes always have certain desirable properties for all possible sets of voter preferences. 
A) Voting theory posits that a majority vote by itself may indicate nothing at all about society's preferences. 
B) In those situations where voting does occur, it can have imperfections, just like markets might. 
C) There will be occasions when voters can advance their individual interests by misrepresenting their preferences or purchasing each other's votes. 
D) It is possible to devise a voting method in which the outcomes always have certain desirable properties for all possible sets of voter preferences.

Question 16

The halfway-point between the buyer's valuation and the seller's opportunity cost is:

Accepted Answer

A) sometimes a focal point. 
B) where the two parties invariably agree to transact. 
C) outside the core. 
D) inside the utility possibility frontier. 
A) sometimes a focal point. 
B) where the two parties invariably agree to transact. 
C) outside the core. 
D) inside the utility possibility frontier.

Question 17

The total of individual payoffs in the grand coalition must be less than the value the coalition earns.

Accepted Answer

A) True 
 B)False

Question 18

In what possible ways can the production of public goods be funded?

Accepted Answer

Once a public good has been produced any

Question 19

Which of the following is an example of a zero-sum game?

Accepted Answer

A) Jill decides to buy a television set from Jack for $500. 
B) Angela buys a jacket worth $30 from the apparel store near her apartment. 
C) Rachel decides to buy Sarah's couch and is willing to pay whatever price Sarah might ask for it. 
D) Joanna buys a camera at a Thanksgiving sale and gets a tripod free. 
A) Jill decides to buy a television set from Jack for $500. 
B) Angela buys a jacket worth $30 from the apparel store near her apartment. 
C) Rachel decides to buy Sarah's couch and is willing to pay whatever price Sarah might ask for it. 
D) Joanna buys a camera at a Thanksgiving sale and gets a tripod free.

Question 20

Given that the value of individual production of Carol and Tessie is zero, while their combined production is positive, we may conclude that:

Accepted Answer

A) any subset of the grand coalition can credibly threaten to block the coalition. 
B) the coalition is not individually rational. 
C) the core is empty. 
D) any allocation of payoffs from the coalition will lie within the core. 
A) any subset of the grand coalition can credibly threaten to block the coalition. 
B) the coalition is not individually rational. 
C) the core is empty. 
D) any allocation of payoffs from the coalition will lie within the core.

What aspects of bargaining can affect market outcomes?

Utility possibility frontier shows:

Identify the public good in the following.

Which of the following statements is true about empty cores?

Explain the significance of voting with suitable examples.

The mutually understood customs the two parties involved in a transaction follow from experience are known as _____.

On the boundary of the utility possibility frontier, if the utility of one person increases, that of the other will decline.

A house is a private good because it is nonrival and nonexcludable.

How can the theory of the core be used to explain the functioning of oligopolistic markets.

Alex's production is worth $60 and Harry's is worth $40.They decide to form a coalition and produce together such that their combined production is worth $135.What is the maximum benefit Alex can earn while ensuring Harry does not leave the coalition?

Elizabeth's opportunity cost of selling a widget is $18, while Jess values it at $27.Identify the correct statement from the following.

Which of the following statements is true about voting results if preferences are intransitive?

An advantage of settling disputes via arbitration rather than court cases is that:

Which of the following statements about voting is NOT true?

The halfway-point between the buyer's valuation and the seller's opportunity cost is:

The total of individual payoffs in the grand coalition must be less than the value the coalition earns.

In what possible ways can the production of public goods be funded?

Which of the following is an example of a zero-sum game?

Given that the value of individual production of Carol and Tessie is zero, while their combined production is positive, we may conclude that:

Reasoning With Economics: Models and Information

Transactions and Institutions: the Building Blocks

Markets

Cost and Production

Extreme Markets I: Perfect Competition

Extreme Markets II: Monopoly

Between the Extremes: Interaction and Strategy

Competition and Strategy

Beyond Markets; Property and Contracts

The Economics of Contracts

Risk and Information in Contracts

Organizations in Concept and Practice

Organizational Design

Vertical Relationships

Employment Relationships

Time, Risk and Options

Filters

Exam 17: Conflict, Negotiation and Group Choice

What aspects of bargaining can affect market outcomes?

Utility possibility frontier shows:

Identify the public good in the following.

Which of the following statements is true about empty cores?

Explain the significance of voting with suitable examples.

The mutually understood customs the two parties involved in a transaction follow from experience are known as _____.

On the boundary of the utility possibility frontier, if the utility of one person increases, that of the other will decline.

A house is a private good because it is nonrival and nonexcludable.

How can the theory of the core be used to explain the functioning of oligopolistic markets.

Alex's production is worth $60 and Harry's is worth $40.They decide to form a coalition and produce together such that their combined production is worth $135.What is the maximum benefit Alex can earn while ensuring Harry does not leave the coalition?

Elizabeth's opportunity cost of selling a widget is $18, while Jess values it at $27.Identify the correct statement from the following.

Which of the following statements is true about voting results if preferences are intransitive?

An advantage of settling disputes via arbitration rather than court cases is that:

Which of the following statements about voting is NOT true?

The halfway-point between the buyer's valuation and the seller's opportunity cost is:

The total of individual payoffs in the grand coalition must be less than the value the coalition earns.

In what possible ways can the production of public goods be funded?

Which of the following is an example of a zero-sum game?

Given that the value of individual production of Carol and Tessie is zero, while their combined production is positive, we may conclude that:

Reasoning With Economics: Models and Information

Transactions and Institutions: the Building Blocks

Markets

Cost and Production

Extreme Markets I: Perfect Competition

Extreme Markets II: Monopoly

Between the Extremes: Interaction and Strategy

Competition and Strategy

Beyond Markets; Property and Contracts

The Economics of Contracts

Risk and Information in Contracts

Organizations in Concept and Practice

Organizational Design

Vertical Relationships

Employment Relationships

Time, Risk and Options

Filters