1.Consider a sequential game between a shopkeeper and a haggling customer. The party who moves first chooses either a high price ($50) or low price ($20) and the second mover either agrees to the price or walks away from the deal and neither party gets anything. Ignore costs and assume the customer values the item at $60.

If the shopkeeper goes first and quotes a low price, what is the best response of the customer?

	a.	Walk away from the deal
	b.	Accept the low price happily
	c.	Laugh at the storeowner
	d.	Slam the storeowners door on the way out

2.Jim is haggling with a car dealer on the price of a used car. If the dealer is getting a bonus per sale made, in addition to the commission, Jim is more likely to be able to

	a.	Walk away from the deal
	b.	Get the car cheap
	c.	All of the above
	d.	Pay a higher price for the car

3.Jim is haggling with a car dealer over the sale price of a used car. When he entered the store he was the only customer. This means that

	a.	Jim has a better chance of having his offer accepted, since the seller does not have any outside offers
	b.	Jim has lower chances of having his offer accepted, since the seller has more outside offers
	c.	The disagreement value for the seller has increased
	d.	Only A&C

4.Jill, a bookkeeper, just received an attractive offer from an outside firm and so she asks for a raise from her current employer. If the management of Jills company is aware of the offer, her raise request is more likely to be

	a.	Accepted
	b.	Rejected
	c.	Laughed at
	d.	All of the above

5.The best threat is one

	a.	You sometimes have to carry out
	b.	You must always carry out
	c.	You always have to carry out
	d.	You never have to carry out