A technological improvement can cause the production possibilities curve to shift outward because
A. maximum feasible outputs of both goods increase.
B. it increases costs and contributes to lower production rates.
C. it causes increases in unemployment.
D. production will fall, but jobs will be saved.
Answer: A
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Consider the simultaneous choice game represented by the matrix below where Player A chooses either Up or Down and Player B chooses either Left or Right.
i. Discuss whether or not either player has a dominant strategy.
ii. Identify the Nash equilibrium in the game and explain why you have concluded that it is a Nash Equilibria.
iii. Now imagine that the game could be played sequentially. If Player A gets to choose their strategy first, can they do better than in the sequential game than in the equilibrium from the simultaneous game? Explain.
In the above table, the average product of three workers is
A) 1. B) 2. C) 3. D) 4.
When the price of a good is legally set below the equilibrium level, a shortage often results. This shortage
a. is a temporary failure of the market mechanism. b. is the result of a shift in demand. c. is the result of a shift in supply. d. occurs because the price ceiling prevents the market mechanism from establishing an equilibrium price.
(I) Differences in worker productivity are one major reason why individual earnings differ.
(II) Even if all workers were identical, differences in the desirability of jobs would still cause earnings differentials. a. I is true; II is false. b. Both I and II are false. c. Both I and II are true. d. I is false; II is true.