Consider Figure 8.9. If Becky's payoff in the top rectangle were 300 instead of 90, the outcome of the game would be that:
A. both choose a high price.
B. both choose a low price.
C. Becky chooses a high price and David chooses a low price.
D. David chooses a high price and Becky chooses a low price.
Answer: B
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The phrase "demand has decreased" means that
A) there has been an upward movement along a demand curve. B) a demand curve has shifted to the right. C) a demand curve has shifted to the left. D) there has been a downward movement along a demand curve.
Refer to Figure 9-1. Under autarky, the consumer surplus is
A) $195. B) $260. C) $300. D) $555.
Price elasticity is a measure of how
A. much a market responds to a change in market conditions. B. much consumers or producers respond to a change in market price. C. quickly consumers or producers respond to a change in market price. D. quickly a market will respond to a change in market conditions.
Dan and Dave are both college graduates. Dan is a patrolman and Dave is a detective in the same police precinct. While Dan's job is inherently more dangerous than Dave's, Dave passed a difficult exam to gain promotion to detective. Dave earns more than Dan because
a. Dave's job is less dangerous. b. of efficiency wages. c. of education as a signal. d. Dave has more human capital.