When economists model a game with three players instead of two, what is different about the payoff matrix and the payoffs listed in each cell of the matrix?
What will be an ideal response?
The payoff matrix contains a separate page for each possible strategy available to one player. On each page, an ordinary payoff matrix summarizes the choices available to the remaining two players, given the strategy chosen by the first player. Each cell shows three payoffs, with the first going to the row player, the second to the column player, and the third to the page player.
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When interest rates rise, the transactions demand for money usually
A) decreases. B) increases. C) decreases initially and then increases to the original position. D) does not change.
Which of the following might explain a decrease in national saving when the tax rate on savings is reduced?
a. its income effect on saving and its effect on the government budget b. its income effect on saving but not its effect on the government budget c. its effect on the government budget but not its income effect on saving d. neither its income effect on saving nor its effect on the government budget
Which of the following acts as an “umpire” in a market system?
a. the stock market b. the government c. corporate executives d. entrepreneurs
Which of the following activities would be included in GDP?
A. You pay a friend $30 to bake a cake. B. You buy a cake from a local bakery for $30. C. You bake a cake for yourself. D. All of these would be included in GDP.