Refer to Figure b. Kate and Alice are sisters with a very strict mother. The girls are not allowed to watch television during the day when their mother is at work. The mother comes home one day and knows at least one girl was watching the television because it is warm. She sends the girls to their separate bedrooms while she decides what to do. After giving it some thought, she decides to send a message to the naughty girls and offers them the following deal: if they both deny watching TV, they will each be grounded for 3 weeks; if one squeals on the other, but the other denies watching TV, the squealer is grounded for 2 weeks, while the denier is grounded for 10; if they both squeal, each is grounded for 6 weeks. The following payoff matrix illustrates the girls' dilemma, with Kate's
payoff shown in the upper left-hand corner of each cell and Alice's in the lower right-hand corner. What is Alice's dominant strategy?
A. Squeal
B. Deny
C. Alice does not have a dominant strategy.
D. Alice's dominant strategy depends upon what Kate does.
A. Squeal
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As the capital-labor ratio increases, investment per worker
A) increases at an increasing rate. B) decreases at a constant rate. C) increases at a decreasing rate. D) decreases at an increasing rate.
Ceteris paribus, if a 4% increase in price leads to a 6% increase in the quantity supplied, then: a. supply is elastic
b. supply is unit elastic. c. supply is inelastic. d. the supply curve is perfectly vertical.
The short-run consumption curve may shift upward over the long run largely because
a. people become wealthier b. the marginal propensity to save increases c. the 45-degree line becomes a 90-degree line d. the demand curve for investment is upward sloping e. economic growth, although still positive, slows down
In the above figure for a monopolistically competitive firm, the total economic profit at the profit-maximizing point is
A. $0. B. $300. C. $360. D. $240.