Joe and Steve are duopolists who each can follow two strategies: cooperate and jointly act like a monopolist, or don't cooperate (cheat) and act like duopolists. Their profits are as follows:
What will they do?
What will be an ideal response?
Both will cheat and end up with $500,000. Why? Suppose you're Joe. If Steve cooperates, you're better off cheating, as you will get $1.2 million rather than $1 million. If Steve cheats, you're better off cheating, as you will get $500,000 rather than $200,000. So no matter what Steve does, Joe will cheat.
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How will the price and output of a monopolist compare with perfect competition?
a. The output of the monopolist will be too large and the price too high. b. The output of the monopolist will be too large and the price too low. c. The output of the monopolist will be too small and the price too high. d. The output of the monopolist will be too small and the price too low.
Which of the following is(are) the main factor(s) spurring economic growth?
A. Improving technology. B. More and better capital. C. More and better labor. D. All of these cause economic growth.
An economic expansion in the United States ________ the demand for exports from Mexico resulting in an increase in Mexican autonomous expenditures and a(n) ________ output gap in Mexico.
A. reduces; expansionary B. increases; recessionary C. increases; expansionary D. reduces; recessionary
Refer to the graphs shown, which show indifference curve analysis with the associated demand curves.
If a consumer is able to move from point B to point C, she is also able to move from point:
A. H to point I. B. E to point G. C. D to point F. D. H to point J.