Game theory shows that cartels
a) should be expected
b) allow firms to maximize joint profit
c) allow firms to overcome the less desired outcome consider with the person's dilemma
d) all of the above
Answer: d) all of the above
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Refer to Figure 7.1. Suppose that instead of $350, Angus earns only $250 by playing the bagpipes, but all other earnings remain the same. If there is no ordinance against loud music, the Coase theorem predicts that
A) Dudley will pay Angus to not play the bagpipes. B) Angus will pay Dudley so Angus can play the bagpipes. C) Dudley will do nothing and Angus will mop floors. D) no bargain can be reached between Angus and Dudley.
Computer forecasting models are most accurate at predicting the economy when
a. inflation is accelerating. b. there is a turn in the business cycle. c. economic conditions are relatively stable. d. supply shocks impact the economy.
When Thomas Malthus argued that the prospects for human flourishing were gloomy and that starvation would eventually become the normal human condition, he was assuming that
A. self-interest will become more intense and religion will cease to be an influential force in society. B. epidemics will overpower the many technological advances that he expected. C. diminishing returns to production will become more apparent. D. diseconomies of scale will become more commonplace.
GlaxoSmithKline attempts to prevent arbitrage of its drug Combivir by selling different colored pills in special bar-coded packages, to identify and track distributors in different markets.
a. true b. false