The above figure shows a payoff matrix for two firms, A and B, that must choose between a high-price strategy and a low-price strategy. For firm A,
A) setting a low price is the dominant strategy.
B) setting a high price is the dominant strategy.
C) setting a high price when firm B sets a high price, and setting a low price when firm B sets a low price is the dominant strategy.
D) setting a high price when firm B sets a low price, and setting a low price when firm B sets a high price is the dominant strategy.
A
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Refer to Cournot Problem. The market price for this good will be
a. $10 b. $40 c. $55 d. $70
The main goals of monetary policy include all of the following EXCEPT
A) attaining the maximum sustainable growth of potential GDP. B) keeping the unemployment rate close to the natural unemployment rate. C) keeping the long term nominal interest rate equal to the real interest rate plus the inflation rate. D) keeping the inflation rate low. E) keeping the long-term interest rate at a moderate level.
Economists use the term externalities to refer to
A) consequences people ignore in their decision making. B) any cost associated with an action. C) foreign imports or exports. D) the behavior in which people actually engage as distinct from their alleged reasons for acting as they do. E) the outside directors of a corporation as distinct from corporate directors who are also managers.
Using the data in the above table, if the price of an hour of labor is $10 and the price of a unit of capital is $20, then the most economically efficient technique for producing 100 sweaters is
A) A. B) B. C) C. D) D.