In the long run, the level of output depends on the price level
Indicate whether the statement is true or false
FALSE
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Making the distribution of wealth ________ equal is ________
A) more; differences in degrees of specialization B) less; differences in degrees of specialization C) more; assortative mating D) less; assortative mating
Refer to Figure 14-9. Uniguest, Inc is a company that provides PCs with internet access and touch-sensitive screens to hotels
Suppose the Hard Rock Hotel and Casino in Las Vegas informs Uniguest that it is considering installing these systems in its hotel rooms. The Hard Rock expects to be able to charge higher prices for these rooms if it installs Uniguest's systems in its rooms. The two companies begin bargaining over what price the Hard Rock will pay Uniguest for its systems, and the decision tree shown above illustrates this bargaining game. Note that the profit figures listed in the decision tree are additional profits for the Hard Rock and total profits for Uniguest. a. Suppose the Hard Rock offers Uniguest $1,200 per system. Will Uniguest accept or reject this offer? Why? b. Suppose the Hard Rock offers Uniguest $800 per system. Will Uniguest accept or reject this offer? Why? c. Suppose Uniguest attempts to obtain a favorable outcome from the bargaining by telling the Hard Rock it will reject an $800-per-system offer. If the Hard Rock does not believe the threat is credible, what will it do? Why? What will Uniguest do? Why? d. Is there a subgame-perfect equilibrium in this situation? Explain.
Bank regulators are concerned about the safety of depositors because
A. bank failures were common throughout most of the U.S. history and have even occurred in recent decades. B. in the absence of federal insurance, depositors would lose their money if a bank failed. C. nervous depositors may rush to withdraw their accounts and produce a “run” that could threaten even a sound bank. D. All of these responses are correct.
If a regulatory commission wants to provide a natural monopoly with a fair return, it should establish a price that is equal to:
A. minimum average fixed cost. B. average total cost. C. marginal cost. D. marginal revenue.